Is the wind blowing from a different direction on credit card issues? Today the Center for American Progress is hosting a program called Who’s in Charge? CAP doesn’t spend much time on lost causes; this is their second major event on consumer debt in less than six months.
The CAP event showcases strong, new voices in the consumer credit fights. CAP is also using the event to unveil an innovative idea to make credit safer for consumers using rating systems modeled on car safety systems. The people are terrific and the policy proposal is interesting, but what interests me most is whether middle class economic issues are beginning to take hold on the political agenda. Today a powerful senator, backed up by a professor and a GAO official presenting two pieces of solid research on credit cards, will be turning up the heat under the credit card issuers. A single conference won’t spell the end of credit card influence, but it may signal that the climate for the card issues will not be so favorable in the future.
Over the past twenty-five years, the credit card industry has grown like the blob, sucking up money from working families across the country. New tricks, traps and tickles have left millions of families mired in debts they may never pay off. Even as the industry “innovates” with cross-default clauses, double-cycle billing, multiple low-balance cards, and a dozen other practices designed to deceive, there hasn’t been a whiff of new regulation. But some new players are taking the field.
Carl Levin, D-MI, the senator who will be kicking off the CAP event, has a perfect background for wrestling with the credit card companies. He jumped into the Enron mess and led efforts to control money laundering, showing that he isn’t buffaloed by complex financial issues. He’s launched investigations on gas price manipulation, suggesting an interest in consumer issues. He also led the effort to ban Senators acceptance of gifts and honoraria, which may have given him a little practice in dealing with his colleagues who take money from the groups under investigation. Now he’s sinking his teeth into consumer credit issues.
The CAP program will be long on solid research. Ronald Mann, Professor of Law at the University of Texas, will be talking about his new book, Charging Ahead! Mann pulls together comparative data on credit card and other payment use around the globe, pushing on the US policies that have caused Americans to sink much deeper into debt than their counterparts in Europe, Japan and Australia.
Adding to the hard data at the event will be David G. Wood, Director, Financial Markets and Community Investment of the GAO. Mr. Wood is responsible for a powerful GAO report that shows that most consumers don’t understand the terms of the credit cards. The book lays a solid foundation for better regulation of credit card disclosures.
CAP also adds its own proposal to the mix, initiating a discussion about whether evaluations of credit card safety would have the same benefits that evaluation of car safety produced.
One more conference, one more gust of wind.
