No slouches, them. The Congress is closing in on maybe slowing down a little of their ability to steal and they can't very well plead their case themselves because, well, everybody hates them. What to do, what to do? Not to worry. They've got a strategy, the kind of mean, stupid, obtuse strategy they specialize in, a strategy that's more of a, you know, scam: piss off their best customers and blame it on everybody else.
Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.
Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.
“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”
True to form, their obscene profits being all that count, rather than ratchet down to something a little less, I don't know, Roman Empire-ish, they're going to ratchet up and squeeze even more people.
I'm just guessing but I'm thinking this is going to backfire on them.
UPDATE: (3.30pm) Having already deep-sixed a rate cap, the Senate is currently patting itself on the back for passing a bill that doesn't exactly kill all those hidden fees so much as force a few of them (only a few) into the open. Chris Dodd is calling it "victory for every American consumer who has ever suffered at the hands of a credit card company". Maybe but it's a pretty meager "victory" no matter how you look at it. Even the establishment-friendly AP recognizes that.
The legislation would not cap interest rates as some lawmakers had hoped. It also wouldn't prevent lenders from finding new ways to drain customers' bank accounts or keep consumers from spending money they don't have. Which is, after all, why the lobbyists were in the halls outside the Senate chamber.
The legislation would not cap interest rates as some lawmakers had hoped. It also wouldn't prevent lenders from finding new ways to drain customers' bank accounts or keep consumers from spending money they don't have.
Which is, after all, why the lobbyists were in the halls outside the Senate chamber.
UPDATE 2: (5.21.09) Balloon Juice's John Cole notes that the ccc's have it backwards anyway: it's the high-paying customers who've been subsidizing the "responsible" customers. In fact, John links to this ittle quote from back in the days when a "responsible" customer who paid his bills on time was considered a "deadbeat."
People who routinely pay off their credit card balances have been enjoying the equivalent of a free ride, he said, because many have not had to pay an annual fee even as they collect points for air travel and other perks.
“Despite all the terrible things that have been said, you’re making out like a bandit,” he said. “That’s a third of credit card customers, 50 million people who have gotten a great deal.”
Robert Hammer, an industry consultant, said the legislation might have the broad effect of encouraging card issuers to become ever more reliant on fees from marginal customers as well as creditworthy cardholders — “deadbeats” in industry parlance, because they generate scant fee revenue.
So sayeth the banks. Kind of proves my point that the NYT article is propaganda.