Check out the latest thing the banking barons and their friends in the Senate are trying to do to us: steal more money from our IRA accounts.
George Miller's House bill to close some corporate tax loopholes and use it to pay for creating more jobs (which seems like one of those why-the-hell-didn't-they-do-this-a-long-time-ago ideas, but thank you to Chairman Miller for pushing this) has a provision in it that Senators who listen too much to banking lobbyists want to take out. The idea is simple: it would require any fees the bankers managing your 401(k) plans take to be disclosed, and require clear information about how much risk and return are in each plan a worker might invest in. Bankers are screaming bloody murder that they might actually have to provide information to their clients, and have convinced the Senate to go along with stripping this provision in the bill.
One of the big reasons banks have grown so big and made so much money over the last 30 years is that they nickel and dime us to death, oftentimes without disclosing what they are doing. Invisible fees for managing your 401(k), or the credit/debit card swipe fees I have been working on with business and consumer groups, are another example. And this nickel and diming adds up: the swipe fee thing siphons $48 billion a year out of the real economy and goes into the banking industries pockets, while a Dept of Labor bulletin estimated that just a one percentage point difference in 401(k) fees would reduce a person's overall retirement income from 401(k)'s by 28% over their lifetime.
This is big money, and it matters a lot - to consumers, Main Street businesses, and to the bank industry. I just saw a report that said that just through March, Visa, MasterCard, and the rest of the big banks had already spent $50 million in lobbying fees alone (that number doesn't include PAC contributions or advertising - just lobbyists) on the swipe fee issue. And their PR guys have gotten a lot of media people to parrot their lines - check out Jean Chatzky on the Today Show echoing word for the word at the end of this segment bankers' talking points about how regulating swipe fees could result in higher costs for consumers (I can't even figure out the logic of how lowering credit card swipe fees will result in consumers paying more, but logic and truth have never been an important component of bankers' lobbying techniques).
The bankers have grown too big, too powerful, and too arrogant for the good of the rest of us. They think it is within their right to gouge their clients, and nickel and dime us in every way they can think of. They get offended if we think they should disclose what fees they are charging, or have a cop on the beat to keep them from taking more of our money. It's time to rein in the power of Wall Street, and show them we aren't going to take their crap anymore.
The prevailing wisdom in this week's press reports about credit card reform legislation now being debated in the Senate is that Senator Dodd's version is stronger than the Credit Cardholders' Bill of Rights, which passed the House easily last month. The New York Times' Carl Hulse concluded:
[The Senate bill] goes farther than a measure already easily passed by the House in imposing an array of new restrictions on credit card companies.
Politico's Victoria McGrane was slightly more accurate:
The compromise [between Banking Committee mates Senator Dodd and Republican Senator Richard Shelby] softened some provisions in Dodd's original bill - which came out of committee without a single Republican vote - but still would give the industry a stronger dose of medicine than the bill passed by the House last month.
As far as they go, these reports are not inaccurate, but they tell far from the whole story. Indeed, the current version of the Dodd bill is significantly weaker than the version that was passed by the Banking Committee. Indeed, the Dodd-Shelby compromise looks very, very similar to Rep. Maloney's bill of rights. The real story is the direction in which compromising with Senator Shelby pulled Senator Dodd. That is, in the direction of the credit card companies.
The Credit Card Accountability, Responsibility, and Disclosure Act, though an important milestone in consumer protections, exhibits the signs of the credit card industry's powerful influence. Unlike the previous version, the bill likely to be passed by the Senate does not explicitly prohibit universal default, the practice whereby a credit card company uses information unrelated to a consumer's credit card as the basis for increasing the interest rate. Instead, card companies are left to decide for themselves when improvements in a cardholder's credit warrant a rate reduction. The previous version, like the House version, limit the number of over-the-limit fees - fees applied when a cardholder charges more than their card limit - that card companies can apply. This version does not.
Instead of outright prohibition of abusively high fees, the Credit Card Accountability, Responsibility, and Disclosure Act requires that fees be reasonable and proportional; the card industry, with easy access to political power, will determine what "reasonable and proportional" mean. Though the Act improves oversight of the credit card industry, the previous version required the collection of comprehensive and detailed information about an industry whose practices are at best opaque and at worst purposefully deceptive.
While compromise is necessary to the legislative process, in this case compromise seems to have been largely one-sided.
The Senate today voted down a proposal that would cap credit card interest at 15%. The Senators who voted against it (only 33 supported it) argued that it was such a "controversial" provision, they were afraid that they would lose support for their consumer rights credit card law that they have drafted, which President Obama has claimed will be some great victory for consumers.
Except the pending law is a bunch of meaningless crap. The real reason they won't cap interest rates is because the credit card companies pay so much money in bribes to the politicians. So they sell their votes. And Obama sells the presidency and the white house. And the public gets screwed once again.
This much ballyhooed consumer-rights law includes such ridiculous "protections" as requiring the credit card company to give debtors notice before they raise the interest rates (to however high they want). What good does that do? The debtor can't pay off the card -- they don't have the money. The debtor can't move to some other card -- they all do the same, they all have the low-interest come-on that is yanked away in 3 months and replaced with the usurious interest.
Loan sharks. Our entire federal government is on the payroll of loan sharks. Criminals. The people who put the Mafia out of business. And they own Congress, and they own the President.
This is what we should do. Stop paying our credit cards. Demand a cap of 10% interest, and don't pay one penny to the credit card companies until Congress gets up off their lazy corrupt asses and passes a law making it illegal for anyone, credit card companies included, to charge anyone more than 10% interest on any loan, charge, or other financial transaction bearing interest.
Want a big laugh? The Republicans keep saying the Democrats are "socialists." The Democrats are closer to being made-men in the mob than to being socialists. Socialists actually do something for the people once in awhile, instead of just shoveling all the money into the coffers of the corporations.
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