Card Act is a Disappointment. Obama and His Promises a Disappointment, too

Last year, Congress passed the Credit Card Accountability, Responsibility and Disclosure (CARD) Act. It was supposed to end the alleged abuses perpetrated by the credit card companies. The law forbids some penalties and interest-rate increases on existing balances.<

Has it worked?

It’s a flop!

George Mason University Law Professor Todd Zywicki points out that the new restrictions hurt more consumers than they help.

Since the Card Act passed, mortgage and Treasury bill rates have dropped a little, but credit card interest went up — from 13 percent to nearly 15 percent. Some banks also stopped offering credit to some people. JPMorgan Chase cut off 15 percent of its customers.

“Enough’s enough,” Barack Obama  said last year. “It’s time for strong, reliable protection for our consumers.” Reform, he promised, would not come at the expense of honest businesses. “Unless your business model depends on cutting corners or bilking your customers, you’ve got nothing to fear.”

Finally! Protection! A new bureaucracy will stop greedy credit card companies from unfairly penalizing you. And it won’t threaten the credit business!

Like so many of the legislation and regulations championed by the liberal elite, it is more talk than action.

So what is the real result of this “consumer” regulation? “Hundreds of thousands of people can’t get cards who used to be able to have cards, and all the rest of us now have to pay more,” Zywicki said.

In fact, the only action we may see as a result of the Card Act is that people at the lower level of the economic ladders will be forced to borrow money from  loan sharks and other leg-breakers.

That’a boy, Barack!