A Good Show

  The golden days of autumn are upon us, a time of basking in comfortable days and cool nights before the cold sets in. Also upon us are the 2004 elections, which, depending on your point of view, could produce a four-year-long summer for the card industry if business-friendly President Bush is re-elected, or a winter of freezes on issuers' freedoms if the Democratic challenger, U.S. Sen. John Kerry, sends Bush packing.
  If Bush remains in office and the Republicans maintain their majorities in both houses of Congress, it's safe to assume that the banking industry, and by extension the card industry, will be able to relax. Now that reform of the Fair Credit Reporting Act is finally done, sweeping laws or regulations that would place heavy new burdens on the card firms would seem unlikely.
  Maybe even some of the industry's pet initiatives, such as bankruptcy reform, will actually get somewhere if Bush is re-elected. Bush's low-key support for the flawed bankruptcy bill in the 108th Congress, however, hasn't been enough to get it enacted. Still, bankers are continuing their long tradition of supporting the GOP. As our story on page 14 notes, card companies and banks in general in this election cycle are making most of their campaign donations to Republicans.
  Kerry, however, is a different story. Tapping consumer ire over penalty fees and interest rates, he recently proposed to rein in certain credit card pricing practices. He also would force issuers to disclose on billing statements how long it would take cardholders to pay off their balances if they make only the minimum required monthly payment. That's to the card industry what the assault weapons ban is to the NRA.
  Kerry's proposal makes for an entertaining campaign, but would he follow through if elected? Even if he were serious about the proposals, delivering on his challenge to powerful banking interests is another thing, especially if Republicans retain control of at least one chamber in Congress, as seems likely. But he still could make trouble for the card industry if he appoints a strongly pro-consumer comptroller of the currency.
  No matter who is elected, my guess is that the card industry will soon be devoting less attention to politics and more to finding new customers. With more than one billion credit cards in circulation in the United States, issuers seeking growth increasingly are eyeing the nation's 14 million-plus unbanked households. Our cover story on page 28 details how card firms are approaching this risky market with stored-value cards, money transfers and other products. They are even pairing up with payday lenders, once the untouchables of the lending industry.
  The effort to get the unbanked into the financial mainstream may not make for good theater like a hotly contested presidential campaign does, but it ultimately could benefit consumers and make a decent profit for the financial industry to boot.