All Hail the Chief

In the spirit of today's Presidential Inauguration, I've been reading up on how our new president and his vice president plan on dealing with the credit card industry.

Barack Obama has attempted to champion for the rights of the everyday "Joe" (occupation left intentionally unspecified), and has supported increased regulation of the credit card industry. He proposed in June 2008 that the government restore regulation of credit card interest rates. (Undernews)

Joe Biden, however, is a defenders of the credit card industry, and will go to the ends of the Earth - figuratively speaking - to protect the interest of behemoths like MBNA and Citigroup.

Biden's position on dealing with the credit card industry is directly opposite that of Obama. As the senator of Delaware, one of the largest hubs for financial services companies in the world, he has had a very intimate relationship with the largest credit card issuers, namely MBNA. In fact, MBNA was the largest contributor to Biden's senatorial campaigns.

According to ProPublica.com "The senator [Biden] was a key supporter of an industry-favorite bill -- the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005" -- that actually made it harder for consumers to get protection under bankruptcy." (ProPublica)

The Times reported, "[Biden] was one of five Democrats in March 2005 who voted against a proposal to require credit card companies to provide more effective warnings to consumers about the consequences of paying only the minimum amount due each month. Mr. Obama voted for it...

Mr. Biden also went against Mr. Obama to help defeat amendments aimed at strengthening protections for people forced into bankruptcy who have large medical debts or are in the military; Mr. Biden argued that the amendments were unnecessary because the legislation already carved out exemptions for those debtors. And he was one of four Democrats who sided with Republicans to defeat an effort, supported by Mr. Obama, to shift responsibility in certain cases from debtors to the predatory lenders who helped push them into bankruptcy." (Times)

It seems that Biden and Obama are on completely different sides of the fence when it comes to regulating the credit card industry. It will be interesting to see how these two compromise on this issue over the next four years.

The passage of the new OTS legislation will make dramatic changes within the credit card industry, primarily in the ways in which these companies are allowed to determine interest rates. However, this law will not take effect until Jan 2010, so consumers will have to perserve through until then.