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Senate Panel Approves Credit Card Reform, Minus One Democrat

The Senate Banking Committee today approved legislation forcing banks to make credit cards more consumer friendly, but don’t mistake this for a strictly

Jul 31, 2020
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The Senate Banking Committee today approved legislation forcing banks to make credit cards more consumer friendly, but don’t mistake this for a strictly partisan issue. While it’s true that most Democrats support the legislation and most Republicans oppose it (the panel vote was 12-11), there are regional nuances in this debate as well.
Take Sen. Tim Johnson. The South Dakotan was the lone Democrat on the banking panel to vote against the bill.
The reason? Well, officially, Johnson saidthe bill “goes too far in prohibiting lenders from adjusting prices to account for increased risk.” (Among other things, the bill requires companies to give 45 days notice when raising interest rates and prohibits issuers from applying rate increases to existing balances — the types of things that would prevent rates from jumping 20 or 30 percentovernight because of a single late payment.)
Yet South Dakota also happens to be a hubfor some of the largest credit card operations in the country, including Citibank. Johnson is clearly protecting the regional industry here, and his opposition to the bill forecasts a tough fight ahead for reform supporters. Indeed, Delaware — another center of credit card activity — is home to Sen. Tom Carper, another Democrat with a history of protecting the industry.
As the stalled cramdown bill has shown, the finance industry has plenty of influence even when the issues aren’t regional. With two Senate Democrats already defending the industry over consumers, the race to 60 is sure to be close.
Camilo Wood

Camilo Wood

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Camilo Wood has over two decades of experience as a writer and journalist, specializing in finance and economics. With a degree in Economics and a background in financial research and analysis, Camilo brings a wealth of knowledge and expertise to his writing. Throughout his career, Camilo has contributed to numerous publications, covering a wide range of topics such as global economic trends, investment strategies, and market analysis. His articles are recognized for their insightful analysis and clear explanations, making complex financial concepts accessible to readers. Camilo's experience includes working in roles related to financial reporting, analysis, and commentary, allowing him to provide readers with accurate and trustworthy information. His dedication to journalistic integrity and commitment to delivering high-quality content make him a trusted voice in the fields of finance and journalism.
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