Ironies of Usury

by Will on September 3, 2010

One of the little-noted things that the current congress and administration did in 2009 was to pass a law binding credit-card companies to do and not do certain things. The banks who issued credit cards fought hard against it, as you’d expect. The credit-card business basically makes no money from its wealthy customers who pay their balance every month, instead squeezing a lot of money from poorer customers who fall behind on payments, get their interest rate jacked up to 30 percent, but then resume payment rather than defaulting altogether. So I’m sympathetic to arguments that they should be regulated, and unsympathetic to arguments that regulation amounts to “denying poor people credit.”

So now that the credit-card issuers are bound by law to treat their customers a bit better, I’m getting regular letters from my credit-card providers saying: “Look at all these cool new features we’re adding to your account! You’re going to love this! Aren’t you glad you do business with Chase Bank, who treats you right?”

That’s the smart way to handle it. They’re smart. If they were sending me letters saying, “this is an outrage! Petition your representatives to repeal this law that protects you from us!”, I’d just snicker and say, “good luck with that.” But it’s still funny when someone is so baldly two-faced. When it’s not infuriating.

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