So far this session, Sen. Dick Durbin has stood behind consumers
like no other public official in Washington. He has served as the Senate Democrats' de facto point man on student aid reform, mortgage bankruptcy reform, usury reform, financial product safety, and consumer credit abuse.
And around every corner, he's been met with resistance by banking
industry lobbyists. In an interview with WJJG's Ray Hanania on Monday, the senior senator from Illinois stated outright that the banks "own" Capitol
Hill. Listen (full audio here):
DURBIN: And the banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the place.
The ongoing negotiations about credit card reform legislation nicely illustrate Durbin's point. According to Hill sources, the U.S. House of Representatives is likely to vote on H.R. 627, otherwise known as the Credit Card Holders’ Bill of Rights Act, as early as Thursday. But it doesn't seem likely that the federal bill will be implemented quickly enough to help strapped consumers this year. For that, we can thank the banks.
Last year, Rep. Carolyn Maloney (D-NY) proposed the bill of rights as a way to clean up this unregulated industry. The bill would stop credit card companies from raising interest rates on balances incurred under an old rate, would let consumers pay off loans with higher interest rates first, and would stop unfair late fees and “universal default” (the odious practice of raising interest rates on accounts in good standing when a borrower falls behind on other bills). While the bill eventually died in the Senate, Maloney reintroduced a similar version again this year and it has since passed the House Financial Services Committee.
But there's a catch. Originally, Maloney's bill required the banks to change their practices 90 days after passage. But a bipartisan group of lawmakers (including Rep. Luis Gutierrez, a recent thorn in the side of consumer groups) amended the bill earlier this month, pushing the effective date to either 12 months after passage or July 1, 2010. This had been a demand put forth by the financial services industry, which claimed that the changes would neccessitate countless hours to implement.
Why is that important? The Federal Reserve passed new credit card rules in December that are scheduled to take hold in ... July 2010, rendering the Congressional legislation rather meaningless. When the Fed announced its changes, Democrats decried the extended timeline. But all it took was pressure from the banks to change their tune. And that will have a painful effect on consumers in the interim, as the Washington Independent's Mike Lillis writes:
That spells bad news for credit card users, as banks in recent weeks have installed a series of fee and rate hikes to churn profits in a struggling economy. In many cases the increases come without any warning to consumers, and they often apply to balances accrued even before the hikes arrive.
“Unfortunately the way the market place is working, [card users] could use more protection, not less,” said Graham Steele, an attorney at Public Citizen’s Congress Watch. “Consumers need relief now, and yet these bills are being weakened.”
Meanwhile, Durbin's bankruptcy reform bill is on course to be gutted by the Senate today, according to the Huffington Post's Ryan Grim. Just another example of Wall Street's outsized influence.
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Comments
leoklein on Thu, 04/30/2009 - 08:16
The most horrible thought is that we'll end up with the same banking industry we started out with.
Anonymous (not verified) on Thu, 04/30/2009 - 12:25
All Bank of America customers should take the time to read through the bank's online terms and conditions with regards to checking accounts. They could have said it in one sentance. The rules are, there are no rules. While they tout their real time banking, in reality what you actually see as your balance can be changed in the blink of an eye if they so desire. They are very creative. They will adjust what you see on screen in order to be able to charge you as many overdraft fees as possible and there isn't anything you can do. If you are expecting one overdraft after reviewing your pending transactions and your balance, by the end of the day they will have adjusted all those pendings so that instead of one you get charged five overdrafts. At $35 each this really eats into your account balance. It's not like they didn't already get billions of our tax dollars, they have to pinch every cent they can from the customers they claim to value. This is a dirty scheme and has caused me, after being with the bank for 33 years to finally decide that I can no longer afford to be one of their valued customers so I'm closing my account and urge everyone with an account there to do the same. Move your account to a communit bank. They seem to be the only ones doing okay and since they are not trying to become some global monster by eating every other bank around, they can actually take care of their customers.
Anonymous (not verified) on Fri, 05/01/2009 - 09:44
I agree! As a BofA customer with checking, savings, credit cards I am currently closing everything with BofA and have signed up with a credit union. I am fed up with BofA and their unscrupulous way of doing business. I selected a CU that is a non-profit community bank, is fiscally conservative, did not receive any bailout money, and did not engage with the subprime mortage loan scam of the century.
Forget about getting any help from the government. As Durbin states, the banks own politicians. The only way real change will happen is action by the people.
If a huge sudden groundswelling of BofA customers all dumped BofA and moved to a credit union, maybe the Financial Industrial Complex will wake up. Change will only happen from the bottom-up. If you are a BofA customer, YOU have the power to create change!! Dump BofA NOW!! I cannot tell you how good I feel! No more complaining - just a very self-satisfying smile and sense of FREEDOM. Please join me and others - DUMP BofA!!
annica2 (not verified) on Sat, 05/02/2009 - 21:48
it wouldn't even matter if everyone dumped their account with bank of america. the federal reserve and bank of america are practically the same thing. look at what the fed and pauslon did to them with merril lynch.
i say dump your account as well, but chances are, it will have no effect whatsoever. the fed will just force treasury again to give them the money they would have had with you as a customer. the key is just to focus on what you can do for yourself. buy gold and silver and keep putting your paper dollars either in a credit union or under your mattress.
Philosophe Forum on Thu, 04/30/2009 - 15:01
Think credit union. They are also non-profits. Scott CU has never let me down.
ALISON, MPA
Philosophe Forum
Sharonsj (not verified) on Thu, 04/30/2009 - 15:16
I'm doing my best to pay off my credit cards, but it means not buying anything, not going anywhere, and staying out of any store except a thrift shop. It's hard doing this while living on Social Security, but I'm tired of the banks and corporations ripping us off. Big business has paid off Congress; it gets anything it wants while the rest of us get the shaft. I'm moving my accounts to a credit union!
leoklein on Thu, 04/30/2009 - 21:56
I'm delighted to say that if things go according to plan (knock on wood), I'll have my school loan paid off by age 75.
My credit cards all went to 25-30% APR, so I'll be taking those debts with me to the other world.
Anonymous (not verified) on Sat, 05/02/2009 - 00:30
The Banks "Own The Place"??
Try "Own The WORLD!!!!"
google "The Money Masters" and watch the video.
Then you will see how private bankers have enslaved humanity for hundreds of years.
aJailooutNotaBailout (not verified) on Sat, 05/02/2009 - 08:40
America does not need the bankers and investors who made bad investments and played the game and were supposed to lose. If every financial building in America were to lose 10 floors, Americans would not know the difference. They lie, about how necessary they are. Other bankers and investors who made good investments are supposed to get a promotion when the losers are supposed to get out of the way. But Thats capitalism - bailouts are a feature of Capitalism not an aberration - every Capitalist system has regular bailouts for those who can afford politicians. Bailouts are Extortion.
Philosophe Forum on Sat, 05/02/2009 - 16:02
Bailouts are Extortion -- Interesting proclamation.
Unfortunately, only a limited number of the 21st Century bankers have the scruples of Mayer Amschel Rothschild (1744–1812) to avert the crises from the market bad guys. Those same bad guys did not want regulations. The politicians gave them what they asked: banking with no regulations. And it all backfired. Many business owners, investors, etc. in need went on camera demanding the bailout money from Congress. So here we are.
Having fun yet?
ALISON, MPA
Philosophe Forum
kateb (not verified) on Sun, 05/03/2009 - 04:48
PEOPLE SHOULD BOYCOTT JP MORGAN CHASE, B OF A, WELLS FARGO.
THEY ARE STILL NOT MODIFYING LOANS PER THE OBAMA PLAN (WHAT
A SURPRISE) THANKS PRESIDENT OBAMA FOR STANDING BEHIND THE
PEOPLE THAT VOTED FOR YOU, AND LETTING THEM STILL BE FORCLOSED
ON. THANKS FOR NOT LOBBYING CAPITAL HILL TO PASS SOMETHING THAT
WOULD HAVE SAVED YOUR VOTERS. I'M NOT SURPRISED, JUST SICKENED.
Anonymous (not verified) on Mon, 05/04/2009 - 15:40
People should demand that representatives who have received contributions from banks receiving bailout money should return the contributions.
Banks (not verified) on Mon, 06/29/2009 - 21:08
I hope that Durbin keeps up the good fight, and is joined by others on Capitol Hill. Consumers need advocates on their site - the banks clearly have their lobby machine in high gear.
dj41326 (not verified) on Mon, 07/13/2009 - 22:05
This is why we must all tell our congressmen to support HR 1207 the Federal Reserve transparency act. We the American people need FULL financial review of the books. We need more people to stand up and say enough is enough. We are tired of being ruled by the banking oligarchs. The Federal Reserve Act was never properly ratified by enough States to pass in the first place. Most people don't even know that when the Fed prints money that the American people pay interest on that money. Doesn't quite make sense.
las vegas web design (not verified) on Fri, 09/18/2009 - 01:50
Ping back from las vegas web design
Glad to see you guys are still writing. Keep in touch!
John (not verified) on Wed, 10/28/2009 - 04:03
Always check the small print on credit card offers. Companies should tell you their policies regarding interest-free grace periods, late payments, and how you will be informed if changes are made to the terms of your contract. If you have questions about specific policies, call the card’s customer service division and ask to speak with a representative. Most card companies are only required to give 14 days’ written notice when making changes to your account. There is pending legislation that seeks to compel card issuers to give more notice before such changes are made.
Thanks,
Life Insurance
Concord Auto Insurance (not verified) on Wed, 10/28/2009 - 06:56
Sen. Dick Durbin (D-Ill.) has been battling the banks the last few weeks in an effort to get 60 votes lined up for bankruptcy reform. He's losing.
On Monday night in an interview with a radio host back home, he came to a stark conclusion: the banks own the Senate.
"And the banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the place," he said on WJJG 1530 AM's "Mornings with Ray Hanania." Progress Illinois picked up the quote.
Earlier Wednesday, Senate Majority Leader Harry Reid (D-Nev.) told the Huffington Post that the most important provision of bankruptcy reform -- the authority for a bankruptcy judge to renegotiate mortgages, known as cramdown, which banks strongly oppose -- could get ripped out of the bill. Speaker Nancy Pelosi (D-Calif.) pushed back, saying that a bill without such a provision wouldn't be reform at all.
Cheap Loan (not verified) on Thu, 11/19/2009 - 13:37
Thanks for this great article.
Pewter (not verified) on Thu, 11/19/2009 - 13:39
Sen. Dick Durbin (D-Ill.) has been battling the banks the last few weeks in an effort to get 60 votes lined up for bankruptcy reform. He's losing.
On Monday night in an interview with a radio host back home, he came to a stark conclusion: the banks own the Senate.
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