Credit Card Reform Likely - But How Meaningful Will It Be?
One way to know that the odds of credit card reform are pretty good is to check out the title of a recent New York Times article: Credit Card Overhauls Seem Likely.
The article, which sums up the pressures on legislators and regulators for reform on the credit card industry, asks another important question for consumers: How meaningful will the reforms be? The reason that is such an important question is that the credit industry has a powerful incentive to take advantage of consumers - and one analyst quoted in the article summed up the difficulty of regulating the credit card industry well:
Adam J. Levitin, an associate professor of law and credit specialist at Georgetown University, said the proposed rules do not go far enough.
“When the Federal Reserve or Congress tries to nip off specific abuses that the credit card industry practices, it becomes a game of Whack-A-Mole,” Mr. Levitin said. “As soon as they put the kibosh on one, the industry figures out another.
For other articles analyzing the probability of credit card reform, check out: Odds of Credit Card Reform in Congress, Credit Card Bill of Rights has Bipartisan Support and How Long Until Credit Card Reform.
Just like the cell phone companies, the credit cards companies will make one tiny tweak to the worst of their many unscrupulous practices and claim that they are reforming and no congressional oversight is required. The cell phone companies agreed to pro-rate their termination fees while doing nothing about the long list of phony fees, coverage maps, customer complaints, contract extensions, and so on. Expect the credit card companies to do the same and expect congress to roll over and give up while claiming victory.