Senate Rejects a 15% Ceiling on Credit Card Interest Rates

[hamburgervol]

May 14, 2009

Despite complaints that banks and credit card companies are gouging customers by charging outrageous interest rates, the Senate on Wednesday turned back an effort to cap interest rates at 15 percent.

The proposal by Senator Bernard Sanders, the Vermont independent, drew only 33 votes and needed 60. A bipartisan group of 60 senators opposed it, though the Senate pushed ahead with other restrictions on credit cards. Some Democrats and consumer groups have said that an interest cap is needed to put real teeth into an otherwise solid bill.

The bill still contains provisions that would prohibit companies from raising interest rates on existing balances unless a card holder was 60 days behind, and then would require the rate to be restored to its previous level if payments were on time for six months. Consumers would have to be notified of rate increases 45 days in advance. Companies would not be allowed to charge late fees if they were late in processing a payment.

Other backers of the measure calculated that an interest rate ceiling would doom the popular legislation. The banking industry, which had some heavyweight representatives monitoring the vote, warned that an interest rate limit could cause a sour reaction in the financial markets. But Mr. Sanders said the card companies and banks were engaged in conduct that could get others hauled into court. He said one-third of all credit card holders are paying interest above 20 percent and as high as 41 percent.

“When banks are charging 30 percent interest rates, they are not making credit available,” said Mr. Sanders. “They are engaged in loan sharking.”

Source:
New York Times
By CARL HULSE

http://www.nytimes.com/2009/05/14/us/politics/14cards.html?_r=2&scp=1&sq=senate%20rejects&st=cse

[JRScott]

This sadly shows us who Congress is representing, and its not the people.....

[banca rotta]

This sadly shows us who Congress is representing, and its not the people.....

I know. I'm just hoping all these news posts like this one or the others about voting down chapter 13 cramdowns will educate some of you that the political party does not matter.

If this was Bush (and he's an idiot) and the republican controlled congress some of you would be all over this.

"Meet the new boss, same as the old boss."

~The Who

[2xBK]

I will vote against any politician that puts the big companies interests (especially the CC companies) before the people's interests. It doesn't matter to me anymore whether they are Dems or GOP. If they vote to screw me I will do my best to vote them out of office.

Unfortunately for all of us, the majority of congress is corrupt and only so many people run for congress so it's impossible to have a truly clean government. A government for the people...

In the end all we can do is try to vote these people out of office in addition to stop using the credit cards.

[JRScott]

The main problem with having choices is that the R and D have passed such odious requirements in each state that it is very hard for any third party candidate or independent to get on the ballot, much less elected. We here in the bastion of democracy are given less choices for each office than the people of Iraq....

[banca rotta]

The main problem with having choices is that the R and D have passed such odious requirements in each state that it is very hard for any third party candidate or independent to get on the ballot, much less elected. We here in the bastion of democracy are given less choices for each office than the people of Iraq....

True but we can at least throw out the incumbents.

I am still surprised even today over six months past the last election that the majority of Americans selected the Dem Party and didn't throw out the incumbents especially since Congress got an even lower approval then Bush at that time.

People must learn, forget the "D" & "R" and throw them out!!!
No corporate bucks can beat our vote by doing that.

[mamaof2]

Yet another reason why i think i made the right decision to file.

[justbroke]

This sadly shows us who Congress is representing, and its not the people.....

Not even the first Continental Congress (including representatives George Washington, John Adams, Thomas Jefferson, etc) represented the People. I think they were sincere though and wanted to do things for the People, but it was never directly representative and always a Republic. Remember, they (the Congress) act, for the most part, unilaterally for what they feel is right. Not exactly what the people want.

I'm kinda glad that we don't run things by poll, but I'm also upset that the Congress seems to represent only the loudest voices (the powerful lobbyists). Should come as no surprise that the Banks... have louder voices than the People.

[JRScott]

Yes we are a Republic, sadly the States have allowed the Federal government to take to much power. The Founding Fathers mostly were afraid of a large central government because they had seen how that worked in the British Empire. The Constitution was a compromise, it in essence allowed the federal government to do minimally and retained most rights to the states and people.

Part of the trouble though are changes that we have allowed to the constitution over the years. For example the 17th Amendment is one I think that has greatly eroded the power of the states. It is the one that allows US Senators to be elected by popular vote, previously they were elected by the State Legislatures. The push to change it was because before the Civil War many of the Southern States refused to send Senators, they did so in protest of the Federal governments policies and by not sending Senators ensured that a majority could not meet and vote. What's amazing is it took them almost 50 years after the war to pass this abomination. It eroded the power of the state's because the state's lost the power to recall their Senator's thus giving power to National Political Parties more interested in the agenda of a few rather than representing all the states. This broke one of the checks and balances in the original Constitution and it should be restored as it was. The idea was that changing it as the 17th Amendment did would remove corruption from the process but far from that it has increased it over the years.

Washington warned in his Farewell address of the dangers of partisan politics. Spoke against the formation of political parties. What we have today is a direct result of ignoring that advice.

[dealingsdone]

I don't think this bill should be passed....Credit Card companies should be able to charge whatever interest they feel is in their best interest....we have the option to not use their credit cards and we also have the option to go BK when we need to...

[shabam]

The erosion of states rights is not the issue here. To the contrary, these companies are using our outdated inefficient 'individual' states rights against us. They establish operations in Delaware style states, only to exploit their weak (even corrupt) laws, only to wreck havoc on consumers.

The irony is that consumers living overseas, under the exact federal system some are against, have much greater protection against corporations than we have here. Take the UK for example, where banking and the credit industry is highly regulated. I even posted an article a while back which shows how it is illegal and considered harassment for a creditor to call you again and again. Contacting your neighbors, brothers, sister, coworkers and parents is illegal there.

[HHM]

I don't think we should necessarily cap interest rates at the federal level, but we do need to regulate the practices of credit cards. I have been tracking my finance charges, even as I pay down my debt, the finance charges each month are creeping upward. Wells Fargo hit me with an inactivity fee the other day (but I called them and they removed it).

[shabam]

Half our politicians are self serving dirtbags anyway. Yes, regardless of the moronic party affiliation symbol next to their name.

My favorite president was Andrew Jackson. While he had many faults, he was someone who dared to take on these crooked banks. He was against national banks as he felt:

* It concentrated the nation's financial strength in a single institution.
* It exposed the government to control by foreign interests.
* It served mainly to make the rich richer.
* It exercised too much control over members of Congress.
* It favored northeastern states over southern and western states.

Looks like his predictions from 1830 proved to be valid.

[shabam]

I don't think we should necessarily cap interest rates at the federal level, but we do need to regulate the practices of credit cards. I have been tracking my finance charges, even as I pay down my debt, the finance charges each month are creeping upward. Wells Fargo hit me with an inactivity fee the other day (but I called them and they removed it).

Something quite common in Europe. The British government clearly grasps that its responsibility is to protect their people, rather than shareholders alone or private interest groups (basically the rich).

The thought of politicians justifying and protecting those who gouge and exploit Americans is a disgrace. Nothing wrong with making money, but certainly is by means of exploiting others.

[JRScott]

I don't think this bill should be passed....Credit Card companies should be able to charge whatever interest they feel is in their best interest....we have the option to not use their credit cards and we also have the option to go BK when we need to...

This leads to the problem of education. However you don't see any mandatory economic course in high school for graduation and it should be there. Every American should be taught how to use credit if they desire responsibly but more importantly taught how to deal with money in general. The problem is the powerful bank lobbies prevents such requirements from being passed.

Its much like the powerful food lobbies that kept soda machines and junk foods in the schools for years, though in recent times we have seen some districts stick up for healthy alternatives and kick them out. Its the same as all those food commercials that claim it can be part of a healthy diet......yet if you go in their restaurants they either can't provide you with any nutritional information or its so obscured that its almost impossible to find.