Let’s begin with a puzzle raised by the previous session on who should regulate consumer protection. We heard from a specialist in administrative law that the design of the current method of bank supervision is the worst regulatory system she has ever seen. The fact that the regulators are paid by the banks (that is […]

Unemployment will be over 10 percent soon, the economy remains fragile, and despite bursts of optimism the recovery looks like it is going to be long and slow. Weighing down on the economy is the fact that many consumers and small business owners are having trouble borrowing. Lots of people are finding that credit card […]

Last Thursday I testified before the House Committee on Financial Services on the “The Credit Card Interchange Fees Act of 2009” sponsored by Representative Welch. The Act would allow merchants to impose surcharges on cards, prevent card networks broadly defined from charging higher interchange fees for reward cards, require card networks to disclose publicly […]

This is the first of several posts I’ll do on the Consumer Financial Protection Agency that the Obama Administration has proposed to protect consumers and investors from financial abuse.
The Administration released an 88 page white paper on financial services reform on June 17th. The CFPA is a major new proposed agency and accounts for a […]

The financial services industry will be more closely monitored if much of President Obama’s regulatory plan that was released today gets enacted.
The White House team obviously put a great deal of work and thought into this plan. Congress, industry and the public will now need to go over it carefully. Here are four questions […]

The populist bandwagon to whack the credit card companies for a financial crisis they didn’t cause is still going on. The latest is proposed legislation —really a revival of stuff that’s been floating around—to help the merchants reduce the fees they pay to the card companies. You don’t need an advanced degree in economics—just […]

Do people spend more if they have a credit card? The answer will depend on who you ask.
Credit card companies say YES! when they extol the benefits of taking cards to grumpy merchants. And credit card bashers say YES! too when they pile on reasons for why credit cards should be banned. […]

I don’t dispute that some card issuers engage in bad behavior and frankly there have been times when I’ve been furious. But there is a lot of market discipline for this; if you threaten to switch cards the issuers back off. Proponents of legislation point to anecdotes of bad behavior. There is, however, no […]

Credit card issuers can be pretty annoying. They stuff our mailboxes with credit card solicitations, make us endure endless commercials about taking their cards, and seem to nickel and dime us with fees at every turn. The media continually reminds us of poor slobs who are up to their eyeballs in debt because they’ve maxxed […]

60 minutes on Sunday presented a report on a worm virus lying dormant in millions of computers worldwide awaiting instructions from China or Russia or wherever it was hatched that could instantly bring down the web. This morning, CNN reported that this virus has a name: “Conficker.” CNN also reported that it may go “live” […]