The Senate overwhelmingly rejected an effort to impose a 15 percent cap on interest rates for banks and credit card companies yesterday. The banking and credit card lobby had made this vote a priority with literally hundreds of lobbyists working members. It was an interesting alliance of Republican and Deomocratic members on a volatile issue.
The statement only seems to confirm a recent statement by Sen. Dick Durban: “And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place.”
The legislation was proposedl by Senator Bernard Sanders, who could only get 33 votes. He lost a large number of Democrats listed below:
Akaka (HI)
Baucus (MT)
Bayh (IN)
Bingaman (NM)
Byrd (D-WV)
Cantwell (D-WA)
Carper (D-DE)
Hagan (D-NC)
Johnson (D-SD)
Kaufman (D-DE)
Landrieu (D-LA)
Lieberman (D-CT)
Lincoln (D-AR)
Murray (D-WA)
Nelson (D-FL)
Nelson (D-NE)
Pryor (D-AR)
Shaheen (D-NH)
Specter (D-PA)
Stabenow (D-MI)
Tester (D-MT)
Warner (D-VA)
For the full story, click here.
As senator Durbin-Dem.Ill.Said and we all know it to be true.”The Banks Own The Senate”.
To compare this list to Dick Durbin’s comment that it’s “hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place,” it’s accurate to say these Senators are the ones who’ve been purchased.
We need to make this list our targets for primary challenges and make them pay for making us pay such outrageous fees after the bailout and amidst the worst economic times since the depression.
That’s why I don’t have any credit cards. If you can’t pay cash for it, then you probably don’t need it. ALthough it is easy to see how a person could get in over their head with one, especially if you are cash strapped.
What I’d really like to see the Senate take on is those stupid pay day loan companies. I really hate how they take advantage of such naive people.
A surprising number of Democratic Senators from beyond the East Coast voted this bill down. You might expect the Delaware and Connecticut and New Hampshire and the North Carolina Senators to vote against it when large bank organizations are based in their states, but Alaska and Montana? I would love to see Sanders call out these Senators and ask them how much money they received from the banking lobby. I know it won’t happen, but a guy can dream, can’t he?
part of the problem we are in now is a direct result of artificialy easy credit as a result of bad Fed. Reserve policy.
Interest rates of any kind should be allowed to float based on market principles. Tying them to a certain cap is asking for trouble all over again.
Government needs to stay out of markets and let markets work. Free markets not government can allocate resources efficiently and effectively.
Think long lines in the old Soviet Union, central planning does not work.
The idea that a bunch of government economists or for that matter private sector economists can control the actions of millions of people taking decisions daily to provide for their needs, wants and desires is laughable at best and inherently bad.
I am all for reasonable regulation, but how does this help anyone? 15% is very low for a short term revolving account. Even if you default on a card, the maximum it can go is 29.99%, still not that bad. The bottom line is, the credit card companies should be regulated so that they can’t bill more than once a cycle, change payment dates without notice, change rates without notice, etc etc. Limiting interest rates will only lower the overall availability of credit. The government should make sure people know what they’re getting into (by increasing transparency and limiting deceptive practices), but not restrict their ability to enter into agreements they choose to.
You may check the campaign donations to each senator for the state in which they are in . I’d start with the secretary of State for each and see how much they have been “given.”
Uncle Tom-Obama get me some water, now!, I am thirsty
Where’s the lobbying reform? As it stands, the Senate is a feeding trough where bribery is the main dish 24/7, whether we the People like it or not.
Where is the promised change? Pres. Obama is letting the People, their Constitution, international law, and the Founders down in all important areas, while protecting Corporate and it’s strangle hold on the People.
He may be gone in four. This time, it’s very likely that no second term ala Bush would be available. Fail the People and kiss the White House goodbye. He’s well on his way to accomplishing that goal. Supporting Bush policy amounts to committing the highest betrayal.
Perhaps a Customer’s Union would be effective in taming the bank beast. Consider this a viable alternative to waiting for a promiser turned Friedman school manipulator and corporate lover to get on the People’s side. This time, a Reagan-like union bust might be off the table entirely.
Where’s the Constitutionalist I voted for? So far, I see inequality, misrepresentation, negligence, and betrayal oozing from every pore. How long will Camelot last? Unless there’s a sharp turn favoring the People very soon, it is over.
http://www.light-to-dark.com/cut_n_run.html
I think we should organize. It’s time to get our point across.
Hey Uncle Tom-Obama, my balls are itchy, scrath ‘em for me.
There is an organization that monitors lobbying, Open Secrets. Pretty interesting. Here’s a link to the congress page.
http://www.opensecrets.org/politicians/index.php
Thanks LindyLou,
This is a great site to know about!
BigEasy,
I think you are crossing the line with your blue rhetoric. There a plenty of people here, including me, who are upset with Mr. O. but you comments are way out of bounds.
FFLEO,
I’m just wondering why The President is getting blamed for a vote in the Senate. Especially one he didn’t seem to have lobbied one way or the other about.
Let’s be reasonable folks.
Gyges,
I agree regarding this specific issue. However, the president sets the stage for all of us and our society reflects what he does, right or wrong.
Mr. O has the ability to become one of the finest presidents in history but he is letting others decide or influence important decisions for him. I have known and worked with many very intelligent, highly credentialed people and some of those people are the finest—yet the dumbest and most naïve—people I have ever known. With the help and suggestion from experienced, although less intellectual, advisors, Mr. O and others like him are destined for greatness or abject failure, largely depending on naiveté.
A fine, intelligent man named Jimmy Carter is the best example of former president who was naïve, based largely on his illogical religious beliefs, I think. How many of us are smart enough for nuclear physics but who could have done a much better job as president?
Leo, et al
the President may not have the ability to make the Senate vote one way or another but isn’t that why he has (our should have) people on his staff who have legislative experience and can work the vote from the inside out?
Who sets the legislative agenda for him? That is the person who needs to hear from us. Was there no room in other pieces of legislation to make any deals for this one?
It seems that on Monday I’ll be working the phones calling the offices of the Senators who voted against this legislation. I don’t care if they are elected from my state or not, once the get to Washington they work for all of us because their votes affect all of us.
There is a distant sound, a chant really, that I once heard loud and clear…. something about government working for Main Street and not for Wall Street…. alas, it has faded to the point where I can no longer hear it or the cheers that once accompanied it.
Is it time to start singing, ‘Bye bye Miss American Pie?”
“part of the problem we are in now is a direct result of artificialy easy credit as a result of bad Fed. Reserve policy.”
Bron,
The problem we have now is greedy banks, who have fraudulently operated their credit card business to make obscene profit. They are legitimized “loan sharks.” The free market you think will work is a total illusion. You give these bankers a free market and they will collude further to maximize profit. You’ve got to wake up and realize that Ayn Rand to the contrary, free-market is an illusion that even its’ inventor Adam Smith believed needed regulation by government. Free Market does not and can not exist. The reason is that no matter what market a company is, in it will do everything in its’ power to control it, or collude with other companies to control it. There is nothing self regulating about it, except in the cheap dreams sold to guys like you who are struggling to make a buck in their own businesses. If a larger business in your field sees substantial profits, they will crush you and you business like a bug and never have a second thought about it.
“I am all for reasonable regulation, but how does this help anyone? 15% is very low for a short term revolving account. Even if you default on a card, the maximum it can go is 29.99%, still not that bad.”
Matthew,
15% to 29.99% are not reasonable rates, they are “loan sharking” rates that the average person can never pay off making minimum payments. They are especially unconscionable when these banks are getting that money by paying 1% interest for loans from the Fed. Up untill the late 90′s rates like that would never be allowed. Sally has the best advice in saying never use credit cards. I’ve followed that same rule through the years and it allowed me to retire comfortably when I became disabled. Most people I know, who are hard workers and not spendthrifts owe $20,000 or more on their credit cards which they struggle to pay off.
“I’m just wondering why The President is getting blamed for a vote in the Senate. Especially one he didn’t seem to have lobbied one way or the other about.”
Gyges,
Herein lies the whole problem I’ve been having as I watch the trolls and some of the “good guys” agree on what a waste the President has been after about 110 days.
Mike,
I don’t know if you remember a conversation that several of us had during the summer. I brought up the point that part of why the crimes of the past 8 years were allowed to happen is that the voting public has a tendency to focus on The President as this mythical figure with the power to change everything about the country. That idea is still on the loose. There are two other Branches of the Fed. Gov’t. who (should) have more than a little say in the state of the country. Bush didn’t destroy the rule of law alone, and nobody should expect any lone hero to fix it alone.
Let’s direct our praise or criticism at ALL of the right places.
Mike
You wrote:
**The problem we have now is greedy banks, who have fraudulently operated their credit card business to make obscene profit. They are legitimized “loan sharks.” The free market you think will work is a total illusion. You give these bankers a free market and they will collude further to maximize profit. You’ve got to wake up and realize that Ayn Rand to the contrary, free-market is an illusion that even its’ inventor Adam Smith believed needed regulation by government. Free Market does not and can not exist. The reason is that no matter what market a company is, in it will do everything in its’ power to control it, or collude with other companies to control it. There is nothing self regulating about it, except in the cheap dreams sold to guys like you who are struggling to make a buck in their own businesses. If a larger business in your field sees substantial profits, they will crush you and you business like a bug and never have a second thought about it.**
My sister in law is a social worker who works with seniors through Jewish Family Services. She had a client years ago, now deceased, who was in the interim stages of Alzheimers. She had a thing for gambling and he friends would take her to the casino where she could put her credit card directly into the slot machine. I had no idea that you could do that, but anyway, this woman would up nearly $100,000 in debt. She had credit cards from the same banks, sometimes up to 6 different accounts, with the same bank. She was trying to make the minimum monthly payments but even that got out of hand and while she was in the middle of bankruptcy she continued to get new cards in the mail. Not applications, but new cards. All she had to do was call the 800 number to activate them. She was declared incompetent and one of he daughters who had no idea what was going on was named conservator.
It isnt the fault of the casinos any more than it would be the fault of catalog companies or department stores. The banks who kept sending her cards knew exactly what they wee doing and it was loan sharking plain and simple. She’d get lured in with zero % interest and within a year it would be raised to 15% and one card was charging 36%.
Of course the banking lobby is as powerful as it is.
and it isn’t because we gave it that power, which we did, it is because we secretly all hope that one day we will be the big winners and we will want our millions and billions protected. and that is the American dream gone bad.
we are one tv episode away from winning $1 million for lying our way through Survivor or knocking down someone trying to catch a taxi on The Amazing Race or catching that millionaire husband. And once we get there, once our lottery numbers come in we want to step over the line from being us to being them. it might happen. it could happen. maybe. someday.
Good Luck GWLSM with those calls. I have a good rapport with my State legislator although that person is a Democrat and I am a lifelong Republican. Same with my Dem. Congressman. My GOP leaders are terrible.
GWMOm,
I am glad that you mentioned the credit card that was charging 36%. I jumped out of my seat when I read Matthew’s posting saying 29% is not bad. I guess it isn’t bad if you are not paying that high of a rate. All of the items that you say they should not be allowed may suffer the same fate as the 15% limitation. The banking lobby has the Congress by the throat and they are not about to let go. Even 15% is too high for a short term loan, especially when the prime rate is so low now.
I have contributed to several of the senators on this list in the past. Never again. As far as I’m concerned, being in the pocket of the major banks belongs in the same category as supporting al qaeda. I can’t say that I’m surprised by a lot of the names on this list (read Specter, Lieberman, Ben Nelson, Jeanne Shaheen, Mary Landrieu, Pryor of Arkansas). But Debbie Stabenow?? And Maria Cantwell? Devastating.
No, 30% really isn’t that bad. If, for example, somebody owes $20,000 to a credit card, 30% interest would come to $6000 per year or $500 per month. Tell me, how many individuals who have to borrow $20,000 in the first place can afford to pay $500 each month in interest?? And that is just interest without paying down any portion of the principal!
Apparently, these days the banks are paying 3% interest to borrow from the Fed. So all they’re doing is making a mere 900% profit. And you want to deprive them of this miniscule amount??
How would they be able to afford their CEOs’s multi million dollar Christmas bonuses, yachts, and trips to exotic resorts???
You really think that putting food on the table for your children is more important than ensuing that the banks can afford those luxuries?? How selfish of you.
The new rule violated the Ferengi Rules of Acquisition.
http://blogdredd.blogspot.com/2009/05/life-in-ferengi-home-world.html
MikeS:
“The problem we have now is greedy banks, who have fraudulently operated their credit card business to make obscene profit. They are legitimized “loan sharks.” The free market you think will work is a total illusion. You give these bankers a free market and they will collude further to maximize profit”
as another installment of our on going debate about the merits/demerits of free market capitalism I offer up the following thoughts.
What about taxes? I freely acknowledge the necessity of some taxes for roads, fire, police and defense of our country. But we don’t need 15%-33% of our income going to the federal government-God only needs 10%. And those numbers do not include state and local taxes and social security payments from you and your employer. An average family making 75,000 per year pays on average 40% of their income to all of these taxes. No wonder your friends cant pay off a $20,000 credit card.
Your premise about collusion of bankers is false. There are couple of minor little concepts called competition and rational self interest. Typically I have found that collusion takes place when the colluders can only survive by collusion. They are afraid of competition. Collusion makes no sense for an individual or corporation that is profitable what do they have to gain?
There is too much dynamism in a free market to make collusion a viable consideration for a business model. There is always some one in the wings to take advantage of inflated prices of other companies. If I was a credit card company I would hope my competitors were charging ridiculous rates so I could lower mine and get more customers or somehow improve my service or price or both. I know what you are thinking at this point but ask yourself why are there only a few credit card companies? Because of government regulations, there is too much of a burden to entry. Government is creating the collusion if there is any through strict regulation of financial services companies which makes the entry to other companies prohibitive and encourages usury of existing companies because they have nothing to fear.
I don’t think the reform being considered by Congress goes far enough because I don’t think they (and we) know the extent to which bankers will go to get their way. On suspicious practices at amcore bank in IL, I recommend the following:
http://euandus3.wordpress.com/2009/11/05/advantage-banks/