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What’s Missing from the Credit Card “Reform” Bill

If these men had known Obama was coming, they would have laughed even harder

If they had known Obama was coming, they would have laughed even harder

Today President Obama signed the so-called “credit card reform bill” into law along with his usual prissy lecture about how Americans have to learn how to behave themselves.

“We’re not going to give people a free pass, and we expect consumers to live within their means and pay what they owe, but we also expect financial institutions to act with the same sense of responsibility that the American people aspire to in their own lives,” Obama said at a signing ceremony in the Rose Garden.

I think he had his fingers crossed behind his back when he mumbled the part about financial institutions behaving responsibly. Anyway here’s what the bill is supposed to do (if banksters were nice, supportive people who wouldn’t take advantage of every possible loophole).

stop arbitrary interest rate increases and “universal default” on existing balances. In universal default, a lender can change a cardholder’s account to costly “default” terms from normal terms when the lender learns the cardholder missed a payment on an account with another lender, even if the cardholder has not defaulted with the first lender

stop card issuers from raising rates for a cardholder in the first year after an account is opened, and require that promotional rates must last at least six months

stop issuers from charging fees for spending beyond their limits, unless the cardholder chooses to allow the issuer to process the excess spending, and restrict any “over-limit” fees

require penalty fees to be reasonable and proportional to the cardholder’s omission or violation

require that cardholders be told how long it would take, and the interest cost involved, in paying off a card balance if they make only the minimum monthly payments

require that cardholders must get 45 days’ notice of interest rate, fee and finance charge increases

Except…if you are more than a month behind on your bill, all bets are off, and your rates can go sky high.

What’s missing from this bill (and what makes it pretty much a toothless sham) is limits on credit card interest rates. There is still no limit on the amount of interest a company can charge you. Usury is still legal. Bernie Sanders tried to save the day, but no dice. The banksters win again.

Before the Senate voted Tuesday, it considered several amendments, not all of which pertained to credit cards. An amendment by Sen. Bernie Sanders, I-Vt., that would have capped credit card interest rates at 15 percent failed.

So there is still no limit on how high interest rates can go. Right now, if you make a late payment, your rates can be jacked up to 40%! If that isn’t criminal, I don’t know what is. With the new law, the companies will have to give you 45 days’ warning before they raise your interest rate sky high.

The other important catch is that banks have plenty of time to raise your rates as much as they want before the bill goes into effect. And banks are already threatening to start charging fees and limit credit.

Critics say help for Americans battling back abusive credit card practices may arrive too late. The Senate bill would take effect in nine months, enabling credit card issuers to jack up interest rates and fees for millions of cardholders ahead of the new regulations.

In fact, an estimated 10 million people holding cards from the eight largest issuers have already seen interest rate hikes of as much as 10 percentage points, according to the Center for Responsible Lending. The issuers—Citigroup, Bank of America, Capital One, HSBC, Discover, American Express, JPMorgan Chase and Wells Fargo—sent out rate increase notices after the Federal Reserve Board in December approved new rules restricting how credit card companies do business. Those rules become effective July 1, 2010.

Predictably, the whiny banksters are having tantrums over this bill, which really isn’t going to help consumers that much anyway. In fact the banksters are saying it will end up costing us all more in the long run.

Banks have repeatedly warned higher interest rates are likely to result because it will be more difficult to set rates based on the risk that customers pose. The higher rates mean less credit available for consumers, they say.

The industry is already experiencing heavy losses from the 90 million households that carry cards. The losses are expected to worsen as the year goes on.

“A lot of consumers have a false sense of security they’re going to get relief,” said Curtis Arnold, founder of CardRatings.com in Little Rock, Arkansas. “The average rate now is 13.8 percent, and I could see it going north of 15 percent by early next year.”

Issuers can try to make up lost revenue from customers who are new or have good credit — about one-third of U.S. cardholders generally pay their bills on time.

Let us never forget that Senator Barack Obama voted against setting a cap on credit card interest rates at 30%. Did anyone really think he would stand up to the banksters this time? By the way, Senator Hillary Clinton voted for that cap on interest rates back in 2005.

I’ll bet you’re wondering if there is any good news about this credit card “reform” bill. Well if you you like guns, there is. Bernie Sanders’ amendment went down in flames, but the amendment to allow people to carry concealed weapons in our national parks made the cut! Ain’t that great?

Saying “I Told You So” Never Gets Old

We PUMAs have said from the beginning that Barack Obama is no different from George W Bush, and of course, no one listened. After all, we are just a bunch of old, unattractive, uneducated, Peruvian lesbians. Who cares what we have to say?

But now even Politico has noted Dear Leader’s mimicking of his predecessor enough to say this:

Truth is, the detention policies of George W. Bush and Obama are more alike than not. Indeed, Bush came within a weekend of announcing the closure of the Guatanamo prison. Somewhere between Saturday and Sunday, he realized he would never get congressional support without a concrete plan on what to do with the detainees. He was right. Obama has discovered he faces the same problem.

Neither speech was really about addressing substantive policy issues. Both were designed primarily to make Americans appreciate the challenges of being president. “Sympathize with me, people!” he was essentially saying. “This governing stuff is hard!”

In the National Archives speech, Obama could have been honest and said, “Look, we are a band of brothers with the last administration, struggling to find the best way to keep us both free and safe.” But he didn’t. Instead he whined, basically saying: “Look at the mess they left me. Feel for me, people.”

What a baby! OF COURSE GOVERNING IS HARD! That is generally what is done when running for public office. You know, governing and all. People vote for a candidate because they expect him or her to govern well.
And sooner or later, as even Politico admits, it’s going to come back to bite the President in the ass:

In the end, both speeches sounded great. The president certainly dodged a bullet at Notre Dame. Likely as not, the National Archives speech will help keep his numbers up, as well.

Over the long term, however, they could well damage the president’s credibility. Those on the left who hated Bush’s policies will figure out in a New York minute that Obama’s are not that much different. Those on the right, meanwhile, will quickly pick out the credibility gap and think of devilish ways to make it wider.

This could well leave us with a president less able to govern. If that happens, though, there is only one person to blame — and it’s not Obama’s speechwriter.

In fact, even some Obots seem to be coming out of their kool aide induced hangovers. Kos has yet to delete and ban the Diarist that has posted this gem:


Wed May 20, 2009 at 04:59:48 PM PDT


there was no reason for this….there was no reason for a lot of things.

But this is ridiculous.

This is not the change I voted for.

Man did I get hoodwinked

from CREW

CREW learned today that the Obama administration is opposing our request that the Supreme Court reconsider the dismissal of the lawsuit, Wilson v. Libby, et al. In that case, the district court had dismissed the claims of Joe and Valerie Wilson against former Vice President Dick Cheney, Karl Rove, Scooter Libby and Richard Armitage for their gross violations of the Wilsons’ constitutional rights.


and you think we are gonna get a truth commission?

or a repeal of DOMA

or a repeal of DADT

or single payer health care.

our MAN has become THE man.

Yes, rubyfruitjungle7, Obama is THE MAN. And you have yourself to blame for him. You could have listened to us. You could have stopped this from happening, but you didn’t. I don’t feel the slightest bit sorry for you, and I will continue to say “I told you so,” until I am blue in the face. I, among many other people here, will mock you relentlessly. Not only because it’s fun, but because it’s a paltry sort of satisfaction. To be honest, it doesn’t make me feel much better.

Because the majority of Americans aren’t Obots. The majority of Americans had jobs to keep, children to feed, sons in Iraq, medication they couldn’t afford, houses in foreclosure. They voted for what they believed and were told was change. They voted for what they thought was a Democrat. They didn’t have any incentive to believe that he wasn’t what he said he was, because they were good people who don’t have time to post misogynistic diaries on Daily Kos. I have no pity for you. It’s them I feel for. They were hoodwinked, not you. You should have known during the primaries, when THE MAN took four delegates that weren’t his and cheated his opponent to get the nomination. You should have known when THE MAN flip flopped on FISA. You should have known when THE MAN used sexism as a campaign tactic to smear and humiliate the women he ran against. You should have known when THE MAN wouldn’t guarantee that every America have Health Insurance. You should have known a million times over, but it was more fun to harrass the people who tried to tell you. It was more fun to call them uneducated, Peruvian lesbians.

You have only yourself to blame for THE MAN.

And that is why mocking you and saying “I Told You So”, will never get old.

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Friday: Haggle

Paul Krugman takes on the healthcare insurance industry this morning. That’s not entirely accurate.  Paul Krugman takes on Obama’s lack of willingness to take on the healthcare insurance industry this morning.  No one who has been reading this blog in the past 16 months will be surprised that Obama is not a fighter and I suspect, Paul isn’t surprised either.  The babies that just had to have their way last year are going to have to explain why *this* is happening:

The story so far: on May 11 the White House called a news conference to announce that major players in health care, including the American Hospital Association and the lobbying group America’s Health Insurance Plans, had come together to support a national effort to control health care costs.

The fact sheet on the meeting, one has to say, was classic Obama in its message of post-partisanship and, um, hope. “For too long, politics and point-scoring have prevented our country from tackling this growing crisis,” it said, adding, “The American people are eager to put the old Washington ways behind them.”

But just three days later the hospital association insisted that it had not, in fact, promised what the president said it had promised — that it had made no commitment to the administration’s goal of reducing the rate at which health care costs are rising by 1.5 percentage points a year. And the head of the insurance lobby said that the idea was merely to “ramp up” savings, whatever that means.

Obama is willfully misconstruing what the American people were demanding last fall.  They weren’t “eager to put the old Washington ways behind them”.  They were *desperate* to put the old Republican ways behind them.  In short, they wanted Obama to act like a Democrat.  They were scared to death by the financial crisis in October and took a giant leap of faith that a Democrat would be the better option.  But if all Obama is going to do is behave like a weak willed, country club Republicanesque, minivan driving, stay at home wife, suburbanite corporate shmoozer of a president, I think he may end up as a one termer.  It could happen.  Ask Jon Corzine.

I have a relative who works for Blue Cross/Blue Shield.   She works in an unmarked building in central PA in what I can only assume is an attmept to keep the desperate from going postal on them. Her bosses are not nice people. They’re the kind that monitor keystrokes and bathroom breaks.  They eliminated her management position and hired her back at a 40% reduction in salary in a different division.  Oh, she still supervises and works overtime.  They just don’t pay her like a manager anymore.  Recently, they booted spouses from their own health insurance coverage.  Yeah, her husband will now have to pay $500/month to be covered by her insurance policy.  No, she didn’t get a raise to make up for this.

If you want to get an idea of how easy it will be to negotiate with a company, just look at the way they treat their employees.  They don’t have to be as meanspirited, untrustworthy and cheap as they are.  They don’t have to behave as though human beings with personal lives are out to take advantage of them in the workplace.  These penny pinching, hard hearted skinflints do it because there is profit in reducing people to cogs in a machine and they can get away with it.

Obama is a fool if he doesn’t know this.  As inexperienced and weak as he is, I don’t think he is a fool.  He’s just not much of a Democrat.

PS.  I do take issue with Paul lumping the drug industry with the healthcare insurers.  Yes, they are caught up in the same kind of financial skullduggery at the shareholder level.  But pharmaceuticals face a completely different set of challenges from patent expirations, a less than adequate FDA and class action lawyers.  I think there is room to haggle with them.

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Your Breakfast Read, Served By The Confluence

Morning Read

  • Tale of Two Speeches
  • Conflicting Views on Terror Fight Get Capitol Airing
  • Obama Said U.S. Went ‘Off Course’ With Harsh Interrogations; Cheney Said They Were ‘Legal, Essential, Justified’

    Speaking for me only, Obama’s speech was fairly nuanced. It had to be, considering the fence-straddling he has boxed himself into. He had to differentiate himself from Bush, respond to his critics from the Left and please them at the same time. At least he seems determined to close Gitmo.
    On the other hand, Dick Cheney’s speech was downright sleazy and full of horse droppings. Here is a very cogent analysis of both speeches.

  • Two Approaches on Gitmo Detainees, No Middle Ground
  • The headlines will say two big, dueling speeches about the war on terror were delivered in Washington on Thursday, one by President Barack Obama and one by former Vice President Dick Cheney.

    And that’s true, as far as it goes. But it would be more accurate to say that four quite different speeches were delivered.

  • Obama Faces Pitfalls With ‘Surgical’ Tack on Detainees
  • Two prominent Obama critics from the Left listened to the President’s speech and were not impressed:

  • Obama on National Security: I Am Doing the Right Things; I Have Not Broken Campaign Promises
  • Throughout the Democratic primaries, the progressive wing of the party said that Obama was extraordinarily liberal, while Hillary Clinton offered “more of the same” (as Bush). But when Obama embraces “preventive detention,” this sounds the same as Bush’s maligned practice of “indefinite detention.” Obama wants to detain individuals consistent with the “rule of law,” but Bush did the same thing, although he called detainees “enemy combatants.”

    Glenn Greewald cuts through the flowery rhetoric and cries foul:

  • Obama’s civil liberties speech
  • Obama repeatedly invoked the paradigm of The War on Terror to justify some extreme policies –(…)– beginning with his rather startling declaration that he will work to create a system of “preventive detention” for accused Terrorists without a trial, in order to keep locked up indefinitely people who, in his words, “cannot be prosecuted yet who pose a clear danger to the American people.” In other words, even as he paid repeated homage to “our values” and “our timeless ideals,” he demanded the power (albeit with unspecified judicial and Congressional oversight) to keep people in prison with no charges or proof of any crime having been committed

  • John McCain gave his succinct review of Dick Cheney’s speech to Jeff Goldberg
  • “Cheney, he says, “believes that waterboarding doesn’t fall under the Geneva Conventions and that it’s not a form of torture. But you know, it goes back to the Spanish Inquisition.”

    Michael Tomasky has review of Dick Cheny’s speech

  • Dick Cheney’s dangerous game
  • While Obama’s speech on national security was judicious, Dick Cheney’s riposte was sleazy, dishonest and divisive

    For those interested in whatever Rightwing nutjobs like Bill Kristol and Rich Lowry has to say about anything, The Opinionator has perused the web for opinions Right and Left about both speeches

  • Speechifying
  • “War On Terror”
  • 3 GIs among 25 killed in 3 attacks in Iraq
  • Three American soldiers on foot patrol were among 25 people killed in Iraq Thursday in an upsurge of violence that brought to 60 the number killed over a 24-hour period, the U.S. military and Iraqi police said.

  • Ex-soldier spared death sentence for Iraq murders
  • An ex-soldier convicted of raping and killing an Iraqi teen and murdering her family was spared the death penalty Thursday and will serve a life sentence after jurors couldn’t agree unanimously on a punishment.

  • New York plot shows ‘bunches of guys’ can become terrorists in post-9/11 world
  • Organized groups are still the main threat, but homegrown jihadists can be very dangerous, too.

  • Terror plot suspects have lengthy criminal records
  • U.S. defense chief lauds soldier in pink boxers
  • Behind the Scenes: Man in the Pink Boxers
  • Economy Watch
  • U.S. to Steer GM Toward Bankruptcy
  • The Obama administration is preparing to send General Motors into bankruptcy as early as the end of next week under a plan that would give the automaker tens of billions of dollars more in public financing as the company seeks to shrink and reemerge as a global competitor, sources familiar with the discussions said.

    This will probably go unnoticed but it shouldn’t. Anne Mulcahy was always one of my favorite CEO. She did a spectacular job at Xerox where she spent 33 years and became CEO in 2001. She has decided to step down and has chosen as successor her lieutenant Ursula Burns, an African-American woman.

  • At Xerox, a Transition for the Record Books
  • According to Xerox, this is the first time a female chief executive has replaced another female chief executive at a Fortune 500 company. In addition, Ms. Burns is the first African-American woman to run a company this large. Xerox reported revenue of $17.6 billion in 2008.

  • A Look Inside Fed’s Balance Sheet
  • Dollar Slides to 4-Month Low Versus Euro on U.S. Credit Concern
  • I’m pretty sure Riverdaughter’s answer to this one is clear, and I know Dakinikat will agree with her. Why does everyone hate us? Is it because of our freedom?
    MBAs: Public Enemy No. 1?

    The debate over business schools’ culpability in the financial crisis rages on, with no clear end in sight

    Because I’m a masochist, here’s more for the enjoyment of those who hate us. In fairness, the people shown here are sleazy characters with an MBA, and not people who are sleazy because they are MBAs.
    MBAs Gone Bad

  • Honey, I Shrunk the Nest Egg (And I’m Sorry)
  • My company retirement accounts, despite what I thought was a relatively conservative mix, were down close to 35% in early March from the fall of 2007. That, in turn, forced me to do some painful thinking about how much risk I can stomach on my family’s behalf, and how much money we can expect to have in retirement.

  • The latest from the “Swine” Flu
  • Flu update from US Centers for Disease Control
  • Study Detects Flu Immunity in Older People
  • Hitchcock’s top 5?
  • Hitchcock – Make a date with the Master

    A season of Hitchcock films on Sky Movies, in association with The Independent, shows a timeless talent

    What caught my attention here is the author’s top 5 list:
    Rear Window
    The Lady Vanishes
    Foreign Correspondent
    The 39 Steps
    Shadow of a Doubt

    Really? A top 5 without North By Northwest, Notorious, but with 39 Steps? What’s your Hitchcock’s top 5?

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