As the Senate Banking Committee marked up its new credit card bill today, consumer groups were busy broadcasting facts and figures on what credit card borrowers need most during tough economic times and which practices would push them past their limits.
Yesterday, the Center for Responsible Lending announced that 72% of the borrowers it surveyed favored an annual interest rate cap at 36% for consumer loans.
The Pew Charitable Trusts today released a
Meanwhile, the Center for Economic and Entrepreneurial Literacy was trumpeting its statistic for the day: the fact that 71% of the respondents of its survey "severely underestimated the amount of time it would take to pay off a credit card balance making only the minimum payments."
These factoids were meant to counter claims like the one made by the American Bankers Association in response to today´s markup that limits on interest rates and other current credit card practices could make it harder for households to access consumer credit at all.
The new credit card bill isn´t the first attempt to regulate the area of lending, and it likely won´t be the last. Even if it were to succeed in Congress, it could fail in practice-that is, unless its final version can be formed around a more advanced debate than the one in which consumer groups and industry lobbyists have been engaged. None of those arguments is new, and none of them prevented the
If high interest rates aren´t the deterrent that they ought to be and if borrowers can´t be trusted to check themselves before they grow their debt to the breaking point, than some other sliding scale of control must be devised. Perhaps those limits will simply be defined by regulations. But if so, one must wonder what card companies will dream of next.
