We may have spoken too soon
May 13, 2009 | federal legislation, industry, regulation | Comments (1)From a Dow Jones newswire story:
The top Democrat on the Senate Banking Committee cited a “growing appetite” among his colleagues for capping interest rates charged by lenders, and the statement seemed to be the latest example of how the tide has turned against the financial industry on Capitol Hill.
Senate Banking Committee Chairman Christopher Dodd, D-Conn., said he expected lawmakers would attempt to attach such legislation to a credit card bill being debated by the Senate this week.
“It’s been discussed, and I suspect before this week is out there will be a couple of proposals in that area,” Dodd told reporters Tuesday at a press conference. “The overwhelming number of people I talk to would like to see some limitation.”
He’s talking about credit card rate caps, but the precedent wouldn’t be good. Payday lending lobbyists are working hard in opposition to any broad sweeping rate cap.
Comments»
The precedent wouldn’t be good, but arguments can still be made to separate open ended vs. closed ended credit. As we know, open ended credit can be much more expensive and the required lending disclosures are more deceptive because the true cost of credit can be spread out over an indefinite amount of time.
The article is citing growing sentiment for a cap amongst Democrats, which really isn’t news. I would be more worried if they were quoting Republicans, too.