So much for getting tough with the credit-financial complex.
Last summer, Barack Obama vowed to crack down on banks and credit card companies by passing sweeping reforms to bar abusive practices. He was going to get tough with the malefactors of consumer credit.
Well, today the Federal Reserve released new rules to "empower consumers." And how did the bankers, who spent at least $6.9 million on lobbying in just the first three quarters of last year, react?
They were overjoyed.
Here's the official press release from the American Bankers Association.
CONSUMERS TO BENEFIT FROM FED’S SWEEPING NEW CREDIT CARD RULES
WASHINGTON – The Federal Reserve today released sweeping new rules to empower consumers as part of the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009.
“These rules – the most comprehensive ever seen – herald a new era for America’s credit card customers,” said Kenneth J. Clayton, Senior Vice President and General Counsel for ABA Card Policy “Many practices that frustrated customers have been eliminated, and credit card users will now benefit from greater control and clearer terms for their accounts.”
This is the most important step in an ongoing process that will increase protections and make card terms more predictable and manageable for customers....
These new CARD Act provisions build upon the protections that took effect in August 2009 and establish a firm foundation that will allow consumers to better understand and use their credit cards. Later this year, in July and then again in August, that foundation will be strengthened further when the rules to improve customer disclosures and provide other consumer protections are implemented.
“This February’s improvements mark the most important step in the comprehensive reform of the credit card industry,” said Clayton. “They put consumers squarely in the driver’s seat by restricting fees and requiring clearer rules and improved disclosures. The bottom line is this: the credit card industry is changing and these new rules will help empower consumers to take control of their personal finances.”
So what are we to make of bankers loving the new regulations? Perhaps they've just become especially public spirited lately. Or have just given up fighting against regulations that endanger their business.
Or, maybe, they got exactly what they wanted.
"If this dynamic -- big business applauding regulations Obama touts as blows to the special interests -- sounds familiar, it's because we've seen it in tax-prep, tobacco, toys, food, and employer-based health-care, among others," Tim Carney writes at the Washington Examiner.
