Austan Goolsbee – Credit Card Bill Kicks in Today
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Austan Goolsbee – Credit Card Bill Kicks in Today

Austan Goolsbee:
I’m Austan Goolsbee of the
Council of Economic Advisors. And I was just sitting here
reading this Reuters article. Headline is “Consumers to
Benefit as Credit Card Law Debuts.” And I was just
remembering that the credit card law that goes into effect today
was one of the very first consumer protections that
President Obama got put in place. And he received thousands
of letters of people complaining about all sorts of practices
that credit card companies were behaving in that they
really shouldn’t. It was the Wild West and
things were out of control. This bill that’s going into
effect today is going to change many things to
protect consumers. The first is it’s going to put
everything aboveboard so that if you get a credit card
application, when you read it, there’s going to be simple and
clear disclosure of what the terms are. I have a
Ph.D. in economics. I can barely read
what these things are. Much less you need
reading glasses. The smallest print
your printer can print. This is going to change that
so anybody can sit down and in plain language understand what
the credit card bill says. The second thing is it’s going
to prohibit a whole bunch of things that the credit
card companies did, the kind of evil genius that
some of these companies engaged in, like setting your
due date to be at 9 a.m. on the due date. So even if you
got the bill there on time, if the mail comes after lunch,
you get a late fee because you missed your payment deadline. Things like that, they’re
just preying on people not understanding the legal parts of
these contracts and it doesn’t make any sense; or moving the
due date around at different days in the month, or sending
you only seven days’ notice to pay your bill. It’s going to
prohibit rate increases in various unfair circumstances. It’s going to prohibit rate
increases based on what happened on some other bill having
nothing to do with this credit card bill. So a number of things
that just make it clear, make it honest, protect the consumer,
and lay it out for you so that you don’t get tricked into doing
things or getting fees that you didn’t know about. The credit
card industry had more than $15 billion of fees last year. It’s
become a great business model for them. But in times like
this, America can’t afford that. This is exactly the kind of
approach that President Obama takes across the board. Whether
it’s in the health plan, financial regulation, in a whole
bunch of things that we got to start looking out for ordinary
Americans, not just for whoever can afford to get a
lobbyist in Washington.

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