Articles
Curious "nay" votes on Credit Card Bill of Rights
by Bill Wilcox
President Obama signed the Credit Cardholders' Bill of Rights Act of 2009 the other day. People may differ over whether the new law goes far enough to protect consumers against credit card companies. Nevertheless, it is nice to see our politicians actually agreeing for a change in an overwhelming bipartisan vote to create some reforms in how the credit card companies deal with their customers. A 357 to 70 vote in the house and a 90 to 5 vote in the Senate is truly an impressive display of bipartisanship. It shows broad support for taxpayers in a difficult economy. While I am frequently a critic of politicians in Washington, I applaud Congress on this vote.
While reading a little further on the new law, a startling fact appeared. Two members of the Minnesota Congressional delegation actually voted against the law when it came up for a vote in the House of Representatives on April 30th. Minnesotans in CD2 and CD6 will be ashamed to find out that the people they sent to Washington as their representatives in Congress actually took this opportunity to side with the credit card companies. John Kline and Michele Bachmann were the only Minnesotans to vote against the law.
Under normal circumstances, we should keep populist rhetoric from inflaming our opinions, but this law was a no-brainer. Maybe the $97,000 that Kline received from commercial banks and investment firms in 2007-2008 had something to do with his vote (Source:
Open Secrets). Perhaps the $137,000 Michele Bachmann received from these same industries in the last election cycle weighed on her mind.
What possibly could Kline and Bachmann be against in this law?
- Why are Kline and Bachmann in favor of predatory practices where credit card companies can open accounts for high school kids?
- Don’t they want our unemployed college students protected from being flooded with credit card offers? Shouldn’t college student credit card limits be based on their income like all other cardholders?
- If we send in a payment above the minimum to a credit card company, shouldn’t that apply to the balance with the highest interest rate first?
- Don’t Kline and Bachmann want credit card holders to receive a 30 day notice before an account is closed? Renters and landlords often have to give at least that much notice on their contracts. Why should cardholders be any different?
- Shouldn’t credit card companies be restricted from charging a fee to people who pay by the internet, since processing those payments costs less than payments by mail?
If you have recently had a credit card company raise your rates for no reason or if you have had your credit balance cut when you have a history of paying on time, you have a good idea of the helplessness cardholders have with an industry that can change the rules in midstream. Customers are powerless to change credit card companies without taking a hit to their financial FICO scores for an additional credit check, so this is truly an uneven match-up. Also, this industry is one of the few in which a contract can be changed unilaterally and you don't even have to notify the other party to the contract that you have changed the terms on money that has already been lent. That does not sound like free enterprise capitalism.
I have no problem with the credit card companies tightening their standards for any new cards they issue. It is their right as companies to try to balance the risks of default for any new customers. A new card application is a brand new contract between a consumer and a credit card company and both sides will be agreeing to the terms. However, changing the rules on existing cardholders is just wrong. Why should hard working Minnesotans who have been paying their credit card balances be subject to changes in fees and rates? We weren’t the greedy ones.
If you live in CD2 or CD6, remember this vote when it comes time for you to pick your representative in 2010. Do you agree with your representative’s choice to support their source for campaign donations, or do you think they should have supported the taxpayers of Minnesota? I would invite you to check out the websites for the two representatives to get both sides of the story, but it would be a waste of your time. kline.house.gov and Bachmann.house.gov are both silent on their credit card law votes.
Each of you has to decide for yourselves whether Kline and Bachmann are working for you. Always remember that your vote is your way of reminding our representatives who they work for. If you think they are working for corporate or other special interests……… fire them.
Bill Wilcox, Burnsville, Vice Chair 2nd Congressional District
