Doddling With Your Credit:
The Senator from Connecticut and the CARD Act of 2009 

November 25, 2009 

The most pestilential quality of Liberals is their ability to: (1) do something in their self-interest; (2) tell you that it is in your self-interest; (3) make the situation galactically worse with their meddling and (4) have the unmitigated gall to tell you that their meddling made it better. 

And such is the case of Democrat Senator Dodd; his Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 and your misery. 

First, let’s deal with the misery. 

I, like almost all Americans with a credit card, received a notice in the mail recently.  My credit card interest rate was increased to 23.99%...let’s call it 24%. 

Right up front I’ll tell you that I pay my credit card bill in full every month and pay no interest.   And, yes, years ago, I was once late with a payment after some orthopedic surgery...but not more than 30 days late and, once I came out of the fog and realized my oversight...I immediately submitted payment in full. 

So it’s not like I’m about to bitch here because I will be directly effected by this Shylockian interest rate increase...I am about to bitch because it is another unnecessary consequence of inept and self-serving political meddling.  And...it’s just wrong. 

When the Democrat Senator from Connecticut, Chris Dodd, found his career sinking in political hot water, he (and/or his handlers) decided that as Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs...he should do something other than being “A Friend of Angelo” or putting in “the fix” for his friends at AIG to receive $165 Million in bonuses...not that it was a return favor for the $280,238.00 in campaign “donations” that Dodd received from his AIG buddies. 

Amazingly, when the subject of Dodd is brought up, people focus on the small potatoes of his personal mortgages and/or the AIG bonuses.  But, little is ever mentioned about the supreme enchilada...Dodd’s deliberate and self-interested role in creating the largest financial meltdown in this nation’s history. 

As the largest recipient of Fannie Mae and Freddie Mac political contributions, Dodd, in 2005, was instrumental in killing any meaningful legislation to avert the sub-prime mortgage meltdown which became a reality within two years. 

Let’s be as fair as any human can be and treat: the political contributions; the preferential mortgage treatment and the AIG bonuses as random coincidences. 

What can’t be ignored is the fact that Dodd, as a member and later as Chairman of the Senate banking committee, either did not recognize the dangers of the sub-prime bubble or ignored them.  He did not do the job he was elected to do.  

As controversy after controversy embroiled Dodd, the senator’s home state approval ratings plummeted.   

A recent Quinnipiac University poll revealed that, “54 percent of Connecticut voters disapprove of Dodd's performance, up from 49 percent in September” and that, “only 39 percent considered Dodd honest and trustworthy”. 

As Quinnipiac University Poll Director Douglas Schwartz so eloquently summed up Dodd’s standing with his Connecticut constituents, “They tell us they'll vote for anyone, even Republicans they haven't heard of” instead of Dodd...or, “ABD sentiment...Anybody but Dodd.”    

One of Dodd’s first great ideas to escape the political graveyard was the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009.   

As Dodd framed his CARD Act after it became law, “Today marks a victory for American consumers... Gone are the days of gouging hardworking families with ‘any time, any reason’ rate increases....” 

As predicted:  I start the year with a single digit credit card interest rate; Dodd tries to boost his re-election chances with the CARD act 0f 2009; my interest rate soars to 24% and Dodd tells me that he has just saved me from  ‘any time, any reason’ rate increases. 

I’ll retire to Bedlam. 

It’s not as though the credit card industry and many economists did not predict that “tough” new legislation would boost credit card interest rates. 

In an April 2009 USA Today article Kenneth Clayton, senior vice president of card policy for the American Bankers Association, promised that the results of overly aggressive Congressional regulation would result in credit, “...become(ing) more scarce and come(ing) at a higher price”. 

The credit card industry made the sensible point that, “The rates consumers pay on credit cards are tied to their risk...If issuers can't raise rates on the consumers who become riskier, they'll have to pass along the costs to everyone”. 

At the time, Dodd responded that, “I don't know how much more costly (credit cards) can be”.  Of course, at the time he must have been speaking about those with bad or no credit. 

Well, Senator Dodd...How about 200%-300% more expensive for a person in your district with perfect credit! 

To add insult to injury, the largest shareholder of my credit card company is the U.S. government...as a result of an almost one third of a $Trillion bailout of this same company. 

So, let’s recap here. 

The government risks over $300 Billion of taxpayer wealth to bailout a bank and then, that same government passes legislation that results in that same bank more than doubling my interest rate through no fault on my part and my Senator tells me that he has just freed me from “the days of gouging hardworking families with ‘any time, any reason’ rate increases”. 

Again, I’ll retire to Bedlam. 

Necessity is bringing the convenient days of finger-pointing to an end.   

There is a catastrophic problem brewing in the credit card market and the CARD Act of 2009 has been more like a secondary infection than a cure. 

Has anybody considered what 25% 0r 30% or 35% credit card rates on people with good credit will do to the already weak U.S. economy? 

It ain’t gonna help the Holiday shopping season...which ain’t gonna help retail sales...which ain’t gonna help umemployment. 

If today’s status quo in the credit card market goes unrepaired, the only outcome will be people with good credit increasingly being forced into default. 

No person or economy can withstand these usurious levels of interest rates without severe and long-term economic damage resulting. 

With these kinds of friends...who needs enemies? 

If Dodd was only proposing his legislation in April of 2009 and that same legislation was signed into law on May 22 of 2009 and it’s not working...how about admitting that maybe you were just a bit wrong and going back to revisit the idea? 

It’s amazing that such far-reaching legislation can be cobbled together and signed into law in a couple of months but that it takes years to undo any damage that was done by the faulty legislation...if it’s ever undone. 

Maybe if laws were drafted for the right reasons (like actually solving a problem) instead of political expediency (like throwing a bone to a special interest group), those laws would actually start to solve problems instead of compounding them on the backs of those who play by the rules. 

Maybe if laws were passed for the right reasons instead of political expediency, it would be easier to repair them for the right reasons instead of not repairing them for political expediency. 

Maybe if laws were passed for the right reasons...those laws would anticipate and avoid catastrophes instead of becoming knee-jerk reactions to those catastrophes. 

Maybe if laws were passed for the right reasons instead of political expediency the U.S. electorate could start giving some credit to its political leaders instead of having our credit destroyed.

 

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