How They “Own” Us: Banks Prevent Credit Card Customers from Testifying
When Dick Durbin pitched his rant on the Senate floor about bankers who "own the place," he asked his colleagues whether they were going to listen to families facing job loss and bills they can’t pay, or the American Bankers Association.
The Senate takes up the Credit Cardholders’ Bill of Rights this week, but that question has really already been answered. When the House Financial Services Committee held hearings on the bill, they invited Kenneth J. Clayton of the American Bankers’ Association to testify.
The ABA spent $2,140,000 on lobbying in the 1Q 2009:
|American Banker Association||$1,890,000||Credit cards, Mark-to-Market Acctounting, Derivatives regulation, Executive pay caps, Cramdown, Tax havens|
|American Banker Association Securities||$20,000||Credit cards, Real Estate brokerage|
|Butera & Andrews||$30,000||Cramdown|
|Clark Lytle & Geduldig||$50,000||Credit cards, Real Estate brokerage|
|Porterfield & Lownthal||$40,000||Credit cards, Regulatory reform, Real Estate brokerage|
|Tassey & Associates||$30,000||Credit cards|
|Glover Park Group||$80,000||Credit Cards|
The ABA PAC also gave $520,000 in political contributions in 1Q 2009, much of it to members of the House Financial Services and Senate Banking Committee, so it’s little surprise they get to have their say in Committee hearings about what should and shouldn’t be done with regard to credit cards.
Tellingly, when the Credit Card Holders Bill of Rights was passed in the House, it did not contain caps on credit card interest rates.
Maybe that’s because there’ a group of people the committee didn’t hear from:
In March 2008, BofA and other big banks successfully prevented credit card customers from testifying at a hearing on Rep. Carolyn Maloney’s (D-NY) Credit Card Bill of Rights. The banks demanded that customers who had flown from all over the country sign waivers allowing their personal financial information to be revealed to the public before they could testify. They refused.
Those hefty political contributions apparently give banks the right to determine who the Committee will and will not hear from, and under what conditions they can testify.
BofA has received over $50 billion in TARP assistance, and will likely need more, but today they hiked their credit card transaction fees and have doubed the interest rates on many credit cards. As Kevin Drum notes, their justifications for things like retroactive rate hikes really make no sense. But unless there is an unlikely turn of events in the Senate, their right to do so will probably continue unabated.