Heroic Corruption

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.


HEROIC CORRUPTION….One of the things that’s made the Rod Blagojevich scandal so amusing is that Blagojevich wasn’t just corrupt, he was comically, heroically, epically corrupt. It was the kind of over-the-top corruption you don’t really expect to see outside an episode of The Sopranos or a Gilbert & Sullivan operetta.

But you know who else is like that? The credit card industry:

The Federal Reserve on Thursday will vote on sweeping reform of the credit card industry that would ban practices such as retroactively increasing interest rates at will and charging late fees when consumers are not given a reasonable amount of time to make payments.

….Among the many provisions is a ban on raising interest rates on existing balances unless the customer was 30 days or more late in paying the minimum….Banks would also not be able to treat a payment as late if the customer had not been given a fair amount of time to make that payment.

The proposal would also dictate how credit card companies should apply customers’ payments that exceed the minimum required each month. When different annual percentage rates apply to different balances on the same card, banks would be prohibited from applying the entire amount to the balance with the lowest rate. Many card issuers do that so that debts with the highest interest rates linger the longest, thereby costing the consumer more.

Credit card issuers, of course, are swearing on their mothers’ graves that these changes will doom the entire industry. They have to have the ability to retroactively change your interest rate just because they feel like it. They have to have the ability to treat payments as late even if customers haven’t been given a fair amount of time to make the payment. They have to have the ability to apply payments to whichever balance is worst for the consumer and best for them.

Of course they do! Never mind the fact that these rules are so comically, so heroically, so Simon Legree-ishly unfair that most people think you’re making things up when you tell them that not only are they legal, they’re standard practice. And despite the protestations of doom, it’s worth noting just how mild these proposed changes are. Card issuers can still retroactively change your interest rate merely for being late on a single payment, after all, which for some people amounts to a late fee of several thousand dollars. Ka-ching!

And while we’re at it, note also that all the wailing and moaning over these new rules comes despite the fact that card issuers succeeded a few years ago in rewriting the bankruptcy laws to give them almost total protection from having to practice actual risk management. They prefer the version where they can give credit to anyone, raise rates whenever they want, and never lose a dime because even if you declare bankruptcy you still have to pay them off.

Universal default should be flatly banned. The 2005 bankruptcy law should be repealed. Credit card fees and interest rates should be brutally capped. Here’s a decent start. Put that in your populist pipe and smoke it.

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate