Senate rejects 15% ceiling on credit card interest

Alas, the Senate yesterday rejected a provision that would have capped credit card interest at 15%:

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. [NYT]

Evidently, usury still has strong bipartisan support.

I can't believe it's not already illegal for credit card companies to inflict late fees for payments submitted on time but processed late.

Comments

[David Dzidzikashvili]

Credit card companies spend extremely large sums of money for lobby groups to ensure that there won't be very strict limits imposed on them and their practices that should be illegal and criminal.

[Eric Jaffa]

Im 2005, when Obama was a Senator, he voted againt a 30 percent limit on interest.

In 2008, in a Democratic debate, Obama claimed that it was because he thought 30 percent was too high.

That argument didn't make much sense, since it would have been a step in the right direction for someone who sincerely believed it should be lower. Also, because states could have still imposed lower limits than the proposed federal limit.

If Obama really thinks that 30 percent is too high, then why isn't he trying to get this 15 percent limit passed (or 20 percent or whatever)?

[rodrigo]

All credit card companies should be monitored.. There are a lot of companies that rip off the poor, and even the wealthy! Hidden costs, and if you should fall behind in paying them, they send out the sharks!

[The Phantom]

Don't forget that Joe Biden is from Delaware, where a lot of credit card companies are located.

Almost all the politicians are bought and paid for on this one.

Next issue.

[Lindsay Beyerstein]

Yes, good old Biden, the member from MBNA.

[mds]

Don't forget that Joe Biden is from Delaware, where a lot of credit card companies are located.

And if it had been a tie in the Senate, he would have voted accordingly.

Seriously, we don't need to look for Biden's malign influence. Grassley was the only Republican in favor of waiving the rules to even consider the amendment, and the metric load of Democrats didn't need any additional prompting beyond that already provided by the banking lobbyists.

And given that 41% interest would cause most people's eyes to bug out, the Senate took the cowardly path, and tried to hide behind the rules:

By 33 yeas to 60 nays (Vote No. 191), three-fifths of those Senators duly chosen and sworn not having voted in the affirmative, Senate rejected a motion to waive section 302 (f) of the Congressional Budget Act of 1974 with respect to consideration of Sanders Modified Amendment No. 1062 (to Amendment No. 1058), to establish a national consumer credit usury rate. Subsequently, a point of order that the amendment was not germane to the provisions of the Budget Resolution was sustained, and the amendment thus fell.

So this was a vote on whether to suspend a requirement of the Congressional Budget Act, in order to even take up Senator Sanders' amendment. So some of the pond scum voting NAY can claim with a straight face that they never voted against the measure itself.

Note that putative bankster puppets Dodd and Schumer voted YEA. Meanwhile, as a variation on The Phantom's Biden observation, you'll have to guess how the senators from Delaware and South Dakota voted.

[Norman Costa]

THREE CHEERS FOR BERNIE SANDERS!

I lived and worked in Vermont for a few years when Bernie was the first Socialist Party mayor of a major U.S. city, Burlington. Almost immediately after taking office, he out-Republicaned the Republicans. The Republicans had the mayoralty wrapped up for years. He threw out sweetheart deals with insurance companies who were given city business by the prior administrations. He saved the taxpayers oodles of money by awarding the city's business to lower competitive bids. And that was just for starters. He introduced various use taxes so that nonresidents would contribute, fairly, for access to the city's benefits and services.

When he went to Congress he did two things that his critics never expected him to do. 1. He championed the Vermont business owner and the farmer. He worked hard to enable working people to go about their business and earn a living. 2. He dropped his sartorial trademark of no tie, open collared shirt, and sweater. He now wears suits, ties, and shirts buttoned to the collar.

Now he's in the Senate. He does not forget the working class, and what it means to try to struggle to earn a living, support a family, and educate your children. I haven't seen his moral compass deflect one second of arc from true north. He stands, as so many in the House and Senate fail to do, against the tyranny of corporate influence in the running of our government, and the abnormal concentration of wealth in the hands of a few.

For those of you are so inclined, please pray for his good health and long life the next time you go to church, temple, mosque, or synagogue. For the rest of us, please wish him well and keep your fingers crossed.

[Lesley]

If I had billions and could work magic, I'd pay the credit card debt of every American on the condition that they could only use credit cards with a permanent guaranteed interest rate no higher than 6%. Just to force these mofo companies to bring down their rates. Not using credit cards is the best revenge.

[TB]

The more I hear about credit card companies, the more I start to think that Tyler Durden had the right idea.