Chris Dodd: you borrow at a rate we approve of or you don’t borrow at all

Given Mr. Dodd’s sordid connections with the banking industry you could explain away his proposed credit card freeze as just plain old Machiavellian politics, but I believe the man is as dumb as this plan is. He really has no clue how business – any business – works, and his being chairman of the Senate banking Committee is just about as insane as Charlie Rangel being placed in charge of writing our tax laws. What a country.

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4 responses to “Chris Dodd: you borrow at a rate we approve of or you don’t borrow at all

  1. Anonymous

    No one smart ever aspires to become a community organizer

  2. Hey Chris, I put this up at my blog with H/T to you.

  3. Old School Grump

    I agree Dodd is a dishonest nitwit. That said, I’d like to look at the issue of credit card rates anyway.

    Just last week, I got a form letter from Citibank informing me that as of 11/30 my MasterCard rate for purchases will be …

    the U.S. Prime Rate plus 26.74%.

    Whoa!

    Spouse and I have good credit scores; good enough so that in Winter 2009 (tough times, you may recall), we easily refinanced our mortgage; we had 20 years remaining on a 30-year fixed at 6 1/2%, and redid it with the same lender to 20 years fixed at 4 1/2%. My point here is that I am a GOOD CREDIT.

    So, is Citibank planning to charge me this much because

    a) this is what they charge their BEST credits, you should see their other rates!

    or
    b) this is what they charge everyone in an effort to make us all pay for the deadbeats they were dumb enough to extend excess credit to over the past 5 years?

    This is a rhetorical question because I pay off my credit card balances every month. But I wasn’t always able to do this, and for many years I was a good credit who actually used credit. There are many solvent, responsible people with good payment records who currently do this, yet, apparently, they are expected to pay these loan-shark rates in order to atone for the excesses of other borrowers and the stupidity of the lenders.

    Setting aside the moral dimension here (as much as it pains me to do so!), I do not understand how consumer lenders expect to regain sustained profitability through loan-shark rates and gotcha fees. The limitations that grandstanding blowhard politicians (see Dodd, Christopher) attempt to impose are just a sideshow — annoying, but just a sideshow. People who can afford to cut back on credit card spending are doing so, and people who aren’t willing or able to do so are just marching into Default Land that much more quickly. Charging 30% interest rates to triple-A borrowers is not going to work for long.

  4. “No one smart ever aspires to become a community organizer”

    To paraphrase George Bernard Shaw, “He who can, does. He who cannot, organizes communities.”