If you’ve been following Congressional schedules, then you know that the House and the Senate are both involved with different versions of proposed credit card legislation. Some people I know feel that additional regulation is not necessary, and moreover the whole process (and Congress) is rife with corruption. I don’t necessarily disagree that corruption in government does and always has existed. But to naysayers, I would throw this out there: if additional protections are not a very good idea consumers, then why are the big banks fighting so hard to prevent them?
It’s a virtual certainty that if banks don’t want the regulation, it must be good for consumers. When’s the last time a bank did anything in your best interest, as compared to their own? When’s the last time that you received a change in terms notice that was good for you? I’ll tell you when, most likely it was after a class action lawsuit was settled, or the bank was otherwise forced to take an action that was in your favor, as compared to being in the bank’s favor. (I would place community banks and credit unions in a different category as compared to the big banks that monopolize the credit card industry.)
According to a CNN report entitled, ”Obama to lean on credit card CEOs,” you may find it interesting to know just how badly the banks do not want consumers to enjoy additional legal protections:
The credit card sector gave as much as $7.3 million to lawmakers in both political parties during the 2008 election cycle, according to the Center for Responsive Politics. Since last October, Visa spent $1.7 million on lobbying, according to government lobbying registries.
That same report also stated, “if the bills advance all the way to President Obama’s desk, it won’t be without a fight.” Banks are fighting for their interest, and not yours or mine, or those of small businesses. Unless you are happy with the way things have been going (and how credit card companies have been treating you and others), now is the time to fight back.
We don’t have the money to ”buy” the votes of our Congressional representatives, but you should let them know that we expect them to finally act in the consumer’s (taxpayer’s) interest on this issue, instead of yielding to the will of a few corrupt credit card company executives and their lobbyists. Be nice, but as far as I am concerned, a vote against these protections is a vote against the American consumer. Contact your representative and those who are involved in the House and Senate versions of these credit card bills. The House committee could vote as soon as tomorrow (Wednesday, April 22, 2009).
The only reason I don’t use the word “never” to describe when banks are on your side is to avoid violating the old adage, “never say never.” Thus, try this phrasing, instead:
When there may be an occasional cold spell in hell, banks may be on your side, instead of their own.
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on Apr 22nd, 2009 at 12:38 pm
There is a documentary called, The Corporation in which the corporation is defined as the equivalent of a sociopath.
In my opinion, If the board members of any corporation aren’t always trying to maximize profits, those same board members will probably be removed and replaced.
Board members work from a standpoint of fear, fear of losing their own very well paying job if they don’t create higher and higher percentages of profit. So, board members have to come up with suggestions and ideas that many times create unnecessary misery for thousands, hundreds of thousands and perhaps even millions of people to justify their own salary while creating additional profit so the company’s stock price continues to rise on Wall Street.
Until Corporate Boardrooms pay outside people to actually represent the consumers voice, nothing will change. I’m talking about people who never even venture into the company, but remain “at large” gadflies looking for a fair balance between the company’s insatiable appetite for more and more profit, and what is actually fair to the consumer.
It will probably take a consumer stock market that grades companies on how well they treat and service the consumer AND employees of the company before real change happens. It will also require other consumers actually using that consumer stock market index to determine their buying habits.
http://www.Daily-Protest.com Help make Change Happen.
on Apr 22nd, 2009 at 1:59 pm
Here is an excellent video where consumer action representative Joe Ridout nails Chase on the changes in “for the life of the balance” changes. The experts at first defend Chases actions and then questions the legality of it.
http://cosmos.bcst.yahoo.com/up/player/popup/?rn=289004&cl=13106756&src=finance&ch=4043681
on Apr 22nd, 2009 at 5:04 pm
Allessandro,
I saw the film.
You are correct. I just have a couple of comments:
The fact the board members behave the way they behave is a sign of total corruption – they are usually very wealthy people who could protest, walk away, etc. I am glad that you mention employees. I am usually sadly amused whenever Americans discuss corporations – they mention the CEO (of course), board members, shareholders and occasionally consumers. Period. What’s wrong with this picture?
on Apr 22nd, 2009 at 5:06 pm
Alessandro,
I apologize for misspelling of you name.
on Apr 22nd, 2009 at 9:00 pm
Dear Dr Bob;
Has it occured to you that there would be no show at all if the banks did not go through the public hand wringing?
Doesn’t it bother you that clips of testimony are provided to the media which create the illusion of antagonism between the banks and the regulators they so generously support?
Not a one of thier minions would win re-election if they didn’t pretend to bite the hand that feeds for the public’s cunsumption.
Bottom line is that new regulation seldom passes even though most committee members are tough in front of the camera.
If it does, it is so diluted that it has no teeth and generally delayed long enough that all expectations of relief subside.
Then it simply is not enforced, and the show begins anew. The other side of Dodd’s bread gets buttered.
on Apr 22nd, 2009 at 10:16 pm
Dear Marv,
Here’s what I know, for sure (other than the exact number of victims):
Chase was able, with smug impunity, to harass 400,000 account holders who were innocent, responsible, and who did nothing wrong. It’s not that I have faith in Congress, but I go back to complete the circle of my point:
“Chase was able, with smug impunity, to harass 400,000 account holders who were innocent, responsible, and who did nothing wrong.”
I respect your intellect and your opinions, but the bottom line is that even the appearance of a fight is good for consumers, because it could bring the media to recognize that people are suffering, which they are.
You are worried about corruption in Congress. And it’s not that I disagree (I think you know I share that same concern, and I recognize the history of corruption).
Meanwhile, I am worried about a media that is “quiet” in the face of an overwhelming, deafening, outcry. This issue must be controversial, public, and loud — this is the means by which all change occurs. To me, this is a game of choosing among the least of evils. What Chase did, should it be allowed to spread “quietly,” is the greater of the evils. Take care.
on Apr 22nd, 2009 at 10:52 pm
Anna, all is well.
Marv, what I find annoying is even if “tough and stringent” credit card laws are passed, congress still gave the credit card companies a window of time this year to pre-destroy millions of people’s credit rating.
When the newer tougher laws come on the books, there will be few people that will enjoy the benefits because we all have been labeled scum sucking bad payers by the scum sucking bad people and their devious methods of hurting people’s credit rating score.
http://www.Daily-Protest.com
on Apr 22nd, 2009 at 11:08 pm
Marv,
P.S. To my comment number 6, above. You might note that even if we do not always agree, I would defend the point that we (you, me, all of us) must all have an open dialog. I am aware of other posts on this site where the notion of having you “go away” has been suggested. I do not agree with that idea, because my biggest concern that we, as Americans, are missing a free and fair media (which is the only way a culture can create a system of free and fair governance).
In other words, we must keep talking (even if at times it is frustrating!).
The media is NOT covering critical aspects of this issue, such as Chase’s missing “opt out,” relative to prior testimony on the part of its Card Services’ top executives.
Here’s what I do know: Controversy, dialog, points of disagreement, and points of commonality, lead to a better understanding among parties. Further, to arrive at the best solution, each and every point if view, along with that which has not as yet been imagined, must be considered. In the meantime, from a practical point of view, I have “X” amount of time and energy (not much), and I have chosen the enemy (or it has chosen me).
That enemy is the “ability” of credit card companies to engage in the most egregious acts they can imagine, with hardly any notice on the part of the media, in a society where we supposedly have a free and fair media.
on Apr 23rd, 2009 at 5:04 am
Allessandro, I think that you follow my point. If it looks like a duck….
There is no real conviction in the legislative drama which is acted out for us by this particular congress. Or the presidential administation for that matter.
They aren’t even good actors. I say follow the money and do it right next time. There are no shortcuts. We have to elect folks who do what they say rather than those who pay lip service and take money under the table from those they are supposed to be regulating.
By the way, If I still lived on the west coast, I would be there by your side. After all, this is the american way isn’t it. A little individual effort is always more useful than expecting government to do everything.
Doc,
I am not so sure about the media point although I allow that this type of embarrassment may be more persuasive. I think it helps victims understand that they are not alone and probably keeps a few from going postal. I believe that facet is more valuble than continually advocating new regulation to be passed, then ignored.
In the end, it is the civil action that will turn this around. Like it has in previous cases of this type. The judgements/settlements will hit the P&L creating public crisis, Obama and Dodd will address this with more bailout $. Chase will reciprocate with huge contributions toward thier reelections.
It’s a lovely dance for the idiot constituency
on Apr 23rd, 2009 at 6:34 am
Marv,
I certainly understand the potential for circularity (and corruption). I’m not sure what aspects “about the media point” that you are not so sure about. I recognize that I did not provide details with which I am familiar when I simply tossed out the result, which is a reluctance to cover the issue on the part of the media. I previously owned a marketing firm, and I also used to work in the newspaper industry. The financial services industry is one of the largest advertisers relative to any measure: frequency, budget, and so forth.
One of my colleagues has also previously been a partner in the ad agency business, and he has worked on the client-side as well with big brands, like Coke and Kellogg’s. I have discussed this reluctance to cover the issue on the part of the media, and the first thing he said (unprompted) was that the financial services industry is a leader in ad spending. Thus, when the coverage is “political” (even if elected officials are grandstanding), at least it gets aired.
I want to add that as a result of this site I have been in communication with numerous class action attorneys; I’m not a lawyer, and I can therefore at best only have a layperson’s understanding of the ins and outs of litigation. However, they consistently say to me that additional regulation is the only long-term solution.
One other thing that I would mention here (I am pressed for time, this morning, and this month), is that the PEW study brought to light some statements from the card industry executives themselves. The general idea is that if one competitor uses a strategy which revolves around bringing in customers with promotional teasers, and then switching them to other higher rates, in order to compete, they have to be prepared to play the same games. See page 5:
“Project staff found that a key obstacle to voluntary credit card reform is that it would require a market player to take the risk of sacrificing revenue-generating practices while their competitors did not. Almost all of the issuers contacted mentioned this challenge, with the added threat of being undercut by less scrupulous competitors advertising low up-front rates. More than one credit card executive concluded that their company would not significantly change their practices unless government policies made all competitors subject to the same rules.”
on Apr 23rd, 2009 at 8:07 pm
My comment regarding the media was more or less to convey the fact that I will believe it when I see the results.
I must remind you all that this Change in terms was already in the works when Obama used Jamie as the epitome of responsible financial stewardship and stated that the bailout would not be required if there were more CEOs like him. Absurd as it was given the fact that Chase was lined up with the rest.
As for my comment regarding the civil suits. The half dozen times this bank (or the scores of times the industry) has done this same thing over the last two decades are well documented on the net. It is always the class action that generates the abatement either through judgment as in the MBNA case or more commonly with settlement.
I know of not one successful criminal prosecution. Do you?
I hope you are right and I am cynical. At best I think only one of those things is true.
on Apr 24th, 2009 at 7:29 am
Hi Marv,
I have no hope whatsoever for criminal prosecution. I am cynical about such a prospect precisely because I think there is system of palm-greasing that goes on between the credit card industry and Washington.
I’ve made a number of remarks and even caught interesting coincidences in writing such as the letter between Chase and the FED prior to new rules under Regulation Z. This is a very cozy relationship. For instance, Chase wanted 18 months before those new rules would kick in, and got its way, while at the same time it argued that customers should only need 15 days to comply with its new rules.
Clearly the FED and the supposedly regulated banks are way too close; this is obviously because: “National banks chartered by the federal government are, by law, members of the Federal Reserve System.” As you know, Chase is a national bank.
I do hope you understand that I am not unaware of the all-too-close relationships and shenanigans between Washington and the banking industry. In particular, I was sickened when I first heard the praise being heaped on Dimon by Obama (worse yet, as you recall, this was at a time when Dimon was under consideration as Treasury Secretary). It’s a corrupt club, and I know that.
Meanwhile, I have been pleased with the “volume” of press coverage about credit card rage over the last 24 hours.
on Apr 24th, 2009 at 12:07 pm
You make my point when you recognize the “palm greasing”
You will never see a roadapple in a still-life or as my nana used to say
“no rose ever blooms on the tumbleweed”
These are the same guys you want to save us….from them.