Why the Democratic majority felt like it had to agree to this "compromise" is a little hard to fathom

Joe Biden

Joe Biden

Yes. Exactly yes.

This is further proof of the corrupt nature of the credit card industry -- the other word for this maneuver is "extortion."

Randy Paul & Phealbo:
You mean, Joe Biden (D-MBNA)? Carper isn't any better.

cant type good...fingers broke

But seriously. If being the woman with whom Spitzer was caught is against the law, why isn't the whole congress in jail. Now that is some serious whoring.

This makes perfect sense because if these people are going to bash the credit card companies about late fees overlimit fees and changes-in-terms, the credit card companies should have the opportunity to explain why these events were triggered. For example the customer was charged a late fee, which is disclosed in the account agreement, because he/she paid her account after the due date. The customer was charged an overlimit fee, which is also disclosed in the account agreement, because he/she charged over her limit. Finally, the customer's payment history with the credit card company may have made the customer a risk and so the company sent a change in terms increases the interest rate on the card or allowing the customer to opt-out and closing the account.

Credit is a privilege and if you're going to use it you need to understand the consequences if you cannot afford to pay the bill.

This requirement is unconstitutional. The publlic is entitled to petition Congress in an unrestricted way, without limiting their civil rights or free speech. I guess when Congress violates the Bill of Rights all at once, it can get a little sloppy.

Biden has more seniority and juice than Carper.

Anyone in Congress who agreed to the "compromise" should be prosecuted for criminal menacing.

the hearing was in the House, people. Biden's a tool for the credit card companies, but he's in the Senate.

Would a person who was turned away from testifying because they would not sign the blanked waiver have standing to take legal action? This sounds like interference with the right to petition the government for redress of grievances, and perhaps prior restraint. I know not everyone gets an opportunity to testify, but once invited, how can congress force you to have the choice of keeping quiet of signing a waiver with a private entity?

("blanket" not "blanked") Although "blankety-blank waiver" is not inaccurate.

Noel -

Nobody else is subjected to this. The "businessman" whining about IRS audits is not required to make his finances available for all to study. The "developer" complaining about wetlands regulation is not required to produce information about the land he is filling. The woman testifying for (or against) abortion rights is not required to make her medical records public. Etc, etc, etc. The information may get revealed anyway, and that is a risk you take by going public, but to pre-sign it away and give up rights like that, no way in hell. Nobody else does that.

And come to think of it, why aren't all meetings with all lobbyists public? Webcams, Youtube, here we go. Constituents are another matter, but paid lobbyists, I think should not get to conduct their business in secret.

Noel,

Your argument ignores two points.

First, while a limited rebuttal might be justified, a blanket waiver of privacy is not. In any event, these individuals presumably were chosen as anecdotal illustrations of the questioned practices, and rebuttal of their particular complaints isn't really relevant to the larger point.

Second, as Professor Warren points out, the credit-card companies were permitted to give factual testimony without waiving privacy rights relating to the underlying facts, but the consumers were not.

So contrary to Rep. Baucus's statement, "fair" is not exactly fair.

Toad

Somebody trustworthy, like Kevin, needs to point consumers to trustworthy, customer oriented banks, credit card companies, insurance companies.

I agree with Noel.

There are two sides to every story. Putting Joe and Jane main Street in the seat before the panel would surely illicit sympathy for their plight if only their side of the story is told. I've got a lot of serious issues with the practices of credit card companies and the like but I also have never been late with a payment nor do I carryover any balances from one month to another. I understand the extreme monetary penal consequences of failing to do otherwise. But that is what my issue is with this trap that these companies set for their "customers." It is akin to casinos extending a line of credit to gamblers with the understanding that the odds are well in their favor that they will make a lot of money once these poor saps burn through more money. Whose to blame for this? The casinos or the gambler?

It is pretty clear the Congressional Committee was wasting its time. They had no interest in getting at the truth.

I read the credit card companies have been disappointed the new bankruptcy law hasn’t helped their bottom line more. They thought they could go after all the deadbeats who could no longer escape through bankruptcy. Instead they are finding out you can’t get blood out of a turnip. Seems like they would have thought about that before handing out credit cards in the first place.

Glenn,

My bad. On the other hand, I wouldn't put it past Biden to call in some favors in the House for this.

To the comment on the constitutionality of the waiver, well you are absolutely right, it is unconstitutional. We are, however, dealing with Congress of the United States. If we have learned anything during the last 8 years it is that our Government, including our Congress, thinks our constitutional rights are optional.

It`s all Bill Clinton`s fault.

"No place is so strongly fortified that money could not capture it." - Marcus Tullius Cicero

The Democrats are officially fucking worthless.

Peacefrogx –
As a practical matter, it is much easier for the government to regulate the casino than to regulate the gamblers. It is reasonable for the government to require anyone running a casino to meet a minimal standard of knowledge and competence. To require gamblers or credit card holders to meet a minimal standard of knowledge and competence is much tougher task.

Credit card rip-offs and bankruptcy are two areas where repubs and a majority of dems agree - give the financial firms what they want. Neutering potential speakers assured that their complaints wouldn't see the light of day. Dems can crow about their compromise, both parties allow the laws to remain status quo, and everyone is happy.

Well, everyone except the general public.

Somebody trustworthy, like Kevin, needs to point consumers to trustworthy, customer oriented banks, credit card companies, insurance companies. Posted by: ferd on March 14, 2008 at 1:14 PM

Respectfully no, it is not.

It is the consumers job to investigate the companies they choose to deal with, it is the consumers job to read the fine print of the contracts, disclosures, and even "junk" mail these businesses send them, and it is the consumers job to utilize any and all businesses with diligence and some common sense. If you don't feel like doing that, you shouldn't have a credit card or sign any contracts in general.

Don't put responsibility on a third party like Kevin. You and I need to be responsible, since it is our money, our spending habits, and our own need for immediate gratification that those maxed out cards represent.

That said, I hate credit card companies and glad I am to be free of them.

"But seriously. If being the woman with whom Spitzer was caught is against the law, why isn't the whole congress in jail. Now that is some serious whoring."

Sorry Thersites, but I am having difficulty trying to read your entrails today. What are you driving at?

"I always pay my bills on time." GOOD for YOU.... elitest snob.

Ok, when you pay on the due date, at the bank or on-line, guess what? It is late as they think the actual cash money must be in their CEO's hand in an undisclosed location by 5:pm Eastern time. They have many tricks like this they use all the time.

Then there's the credit reporting agencies. It's way to easy for anyone to send in a bad report. No accountability for the collection companies to look into any alledged late bill that comes accross their desk. It's all money to them, and the consumer is fodder.

Personally, I'd like to get my hands around one collection company's throat. I wrote 5 letters to them defending myself against a small company who wrongly billed me just $91.00. Nothing moved them to look into the truth, and they sent it into the reporting agency. Since then, I figure it has cost me more than $1000.00 in increast interest rates. This IS bullshit. It is a one sided game for the elitest snobs who are are government leaders and "slave owners".

Money money money, all about the love of it.

I really do not understand these anti-consumer personal-responsibility arguments in the context of consumer credit. The information disparity between your average credit-card applicant and a multi-hundred-billion-dollar bank advised by $750/hour lawyers is simply staggering. It is not a level playing field, people. What is more, the creditors do not want it to be a level playing field. Any regulatory measure designed to ensure that only those people who can read and understand all the fine print can get credit would be vigorously opposed by the credit card companies, because a measure like that would drastically shrink the credit market. What the creditors want is basically what they have: a large market of people who feel they need credit cards, an informational playing field skewed in their favor, and courts that enforce every consumer-unfriendly provision in these contracts.

So let's flip that personal-responsibility argument, shall we? The creditors have aggressively pushed to expand the credit market to people who, it turns out, don't well understand the terms of credit and are much less able to accurately measure the risks and benefits than the credit card companies are. Once those people are carrying balances they can't readily pay off, after being urged to do so by the creditors, the creditors then unilaterally change the terms of the agreements in their own favor, citing the risk that they should have known about all along. And when the debtors don't pay, the creditors come whining to the government for help (read: file collection lawsuits).

What's that saying about an ounce of prevention?

A guy I know (not me I'm one of those elitist snobs who pay bills on time) maxed out his credit card one month so he stopped charging. Next statement he received had an over-limit charge. Seems the credit card folks added the accumulating interest to his balance which caused it to go over-limit. Read your fine print.

Just another reason to be elitist and not let these extortionists hold you by the short hairs.

Zit: It is the consumers job to investigate the companies they choose to deal with, it is the consumers job to read the fine print of the contracts, disclosures, and even "junk" mail these businesses send them, and it is the consumers job to utilize any and all businesses with diligence and some common sense. If you don't feel like doing that, you shouldn't have a credit card or sign any contracts in general.

Similarly ...

It is the creditor's job to investigate the consumers they choose to deal with, it is the creditor's job to assess the credit worthiness of their potential customers prior to issuing them credit, and it is the creditor's job to utilize any and all businesses with diligence and some common sense. If they don't feel like doing that, they shouldn't issue credit cards or sign any contracts in general.

That used to be a popular, and reasonably profitable, business model. Deceptive practices and practices changed at the creditor's whim were left to a different class of business people, known in the vernacular as "loan sharks".

In any event, these individuals presumably were chosen as anecdotal illustrations of the questioned practices, and rebuttal of their particular complaints isn't really relevant to the larger point.

Posted by: The Fabulous Mr. Toad on March 14, 2008 at 1:13 PM |

Exactly right there, Mr. Toad.

Just another example of the Democrats' use of victims that they believe cannot or more importantly believe, should not be subject to scrutiny or criticism in their campaigning for the Dems policy.

The Dems chose these people to testify because it would provide the media with great video of helpless consumers being abused by the big, bad credit card companies, which would be helpful in passing whatever legislation the Dems want to pass.

Well, Chicounsel, since the Democrats were complicit in stopping the consumers from testifying, I think you're giving them too much credit, so to speak.

But I would say that Elizabeth Warren, Katie Porter, et al., chose the individuals to testify in an effort to put a human face on a problem whose implications for regular people can easily get lost in a flurry of dollars.

Let's all be honest, credit cards are like crack cocaine and if you abuse your credit card you will pay in the end with fees and high interest charges. However, all of this is disclosed in the credit card agreement. Now, I can understand the argument that the terms of credit need to clearer so that people better understand the consequences of carrying a balance, paying late or going over the charge limit. But beyond this, the credit card agreement is a contract between the consumer and the bank. If the consumer doesn't like the terms, he/she should not get a credit card with that bank.

The big issue is that US consumers have relied on debt to get by. If anything, US consumers need a lesson on finance and the importance of saving. In fact, I think the US savings rate as at the lowest its ever been which is not a good sign. If you really want to beat back the big banks, stop using their cards to purchase items you cannot afford and pay cash.

I also understand that people get in debt because healtcare issues and healthcare costs needs be addressed on a national level but focusing on the credit card business is the wrong place to direct one's attention when it comes to healthcare costs.

PAY CASH!!!!!!!!!!!!

For centuries in Medieval Europe a Christian could be excommunicated for loaning money for interest. Do you think we can convince the Evangelicals to change back to this standard?

Noel at 4:25,

I agree with most your comment, as good common-sense financial advice. I don't agree that the points you make constitute a good argument against regulation of the credit industry.

"Making the terms clearer" as a substitute for regulation was attempted in the early 70s, with the Truth In Lending Act. Trouble is, consumers don't understand the math in the TILA disclosures, and the companies have found all sorts of bait-and-switch ways to change the terms after the fact, "disclosing" the changes by means of a bunch of legal gobbledygook on statement inserts that nobody but consumer lawyers read.

Taking you up on your comparison of credit cards to crack cocaine, in the latter situation we don't think it's OK to just punish the user and let the dealer make as much money as he wants.

About 10 years ago, there were congressional hearings into the supposed abuse of taxpayers by rogue IRS agents.

Lots of horror stories -- heavily armed agents swooping in to seize someone's business or family farm. All heartbreaking stuff.

But not one person who testified would sign a waiver allowing the IRS to make public its side of the story.

Which tells me everything I need to know about these supposed victims of overreaching tax collectors.

A House hearing on the business practices of credit card companies has got to be about as unfriendly a venue for the issuers as exists.

If I were Joe Blow with a legitimate beef against the card companies, I'd like to see them explain why they crapped all over me. So I'd sign the waiver.

You'd think the House Democrats would be savvy enough to invite testimony from people whose cases were strong enough to withstand a counterattack from the card companies.

What better way to put a face on the rapacious (and ordinary) business practices of the card companies than to make them defend abusing the hell out of some poor widow who is present in the room?

But, no, the Democrats muff another chance to gain ground on the Republicans.

There's only one way to "win" the credit card game: refuse to play. As in, don't HAVE credit cards. (Okay, just ONE, if you absolutely must, for emergency use ONLY, and all charges paid off IMMEDIATELY.)

No responsible person needs more than one credit card - and many can get by with none. (I've been getting by with just a bank debit card for years, after getting burned once too often by the credit card usurers.)

Think about it.

Cash Money: A House hearing on the business practices of credit card companies has got to be about as unfriendly a venue for the issuers as exists.

My heart bleeds for them. OTOH their lobbyists get plenty of warm understanding.

BTW, since when has congress worried about unfairly skewering someone for the sake of their political theater? The only plausible explanation for their sudden concern for "fairness" is that they get plenty of bribes (oops, I mean campaign contributions) from the credit card companies.

See how compassionate our government is? All the compassion you can buy.

Good I must have had a harder week than I thought. I actually agree with what the Fabulous Mr. Toad said!

Time to go home and have a drink. I'm thinking maybe the appletini someone suggested on one of today's threads.

Those of you saying the CC companies need to bring up the information on the borrowers to defend against the charges: They don't need to pull it up to make a general point about the sort of thing that happens. They can say, things like X happen which make it hard for us etc.

Does anybody know the names of the Democrats who agreed to this horror? I think it is time these bozos emerged from behind the protection of their lobbyists' skirts.

So Mr. Unsel, were you this up in arms when the Republicans trotted out a bunch of tax cheats who knew the rules and still went before the Congress to grandstand about the awful tactics of the IRS? All so the Republicans could use the media to show these poor, poor victims and pass legislation based on emotion rather than fact.

Or was that different?

Political accountability? Yeah right.

It is the dirty tricks that credit card companies do to customers that are in need of regulation. Such as the old changing the due date, sometimes as many as 7 days. I see no possible reason that it matters which day the due date is on, as long as it is paid once in the month. And wtf is high risk if in 20 years of never missing a payment there are a couple of late payments [ late by 24 hours and/or by tricks ].At that point you are punished by 32% intrest rates for 6 months. Please, please I've rehabilitated myself. Thanks for showing me the errors in my life. What's the due date next month, please sir? oh....well, surprise me then sir, as usual.

It is the cardmember agreement wording that needs to be oversighted. It is wrong period to make money by trick wording.

The real problem is that the Democrats didn't make the effort to find witnesses whose case against the issuers was so rock-solid that there was nothing the issuers could do/say to defend themselves. There's got to be 1000's and 1000's of Americans who fell victim to these bastards.

Instead, the Democrats find a bunch of whiners who knew damn well their weak-ass cases would collapse the first time the issuers return fire.

This craven act of a Democratic House is just another slap in the face of people who pay taxes to go along with today's Bear Stearns bailout.

Instead of blaming one Democrat, blame all of them. Has Obama or Clinton expressed any opinion about this? They need to be put on the record.

Money to bail private Americans out of the hole $1.95
Money to bail out Bear Stearns .... Priceless

The Emperor does a two-step on the White House Balcony
while his empire burns to the ground!

It says in a couple articles I read that Maloney, who is the one who wrote the Bill, was outraged about this. She also says that this has never happened before. Does anyone know if there were really other Dems supporting this?

http://www.komotv.com/news/consumer/16660541.html

I actually don't think the bill goes far enough. If Congress can bail out banks for their own mistakes, why can't consumers get at least some protections from predatory lending.

I was trying valiantly to pay down my Amex balance, so I made two payments within 3 weeks because, dammit, I could, on this rare occasion, afford it. Turns out the last one fell into the same billing cycle due to my lack of awareness. So now I'm late on my payment and not only do I have a strike against me on my credit report, but I also have a $38 late payment fee. Fcuk them. Stimulus check meet credit card balance, meet fcuk you Amex forever.

Somebody trustworthy, like Kevin, needs to point consumers to trustworthy, customer oriented banks, credit card companies, insurance companies.
==== ==== ====
Begs the question. Are there trustworthy, customer oriented banks, etc.? Every bank I've ever been inside was about as customer oriented as a cobra, and in much the same way.

No, Noel, it's not about individuals' credit histories, it's about abusive practices by the credit card issuers, many of which damage an indivdual's ability to pay. This is a case of pure political muscle, chutpah, and Congressional corruption. Shame all around, but not on the poor sap saddled with $39 late fees and huge interest charges for being a day late, or a dollar short. That such subversion of the rights of free speech and the notion of open government is tolerated would be alarming if it wasn't now so typical.

Previous post, I meant, of course, "chutzpah."