Progressive Breakfast: Restoring Rules On Credit Cards
By Bill Scher
April 23, 2009 - 7:17am ET
Restoring Rules on Credit Cards
Credit card crackdown bill moves. CNN/Money.com: " A key House panel on Wednesday advanced a bill to crack down on credit card interest rates and fees amid signs the Obama administration will try to toughen the bill further before it goes to a full vote. The House Financial Services Committee passed the bill 48-19; nine Republicans joined the panel's Democrats in voting for it. The bill could go to the full House for a vote as soon as next week ... The White House intends to reveal its proposed changes Thursday after the meeting with [credit card] executives."
W. Post adds: "The bill sent to the House floor Wednesday would codify new Federal Reserve regulations aimed at curbing credit card abuses. A separate bill in the Senate, sponsored by Sen. Christopher J. Dodd (D-Conn.), would go even further, prohibiting companies from applying a variety of charges. The measure includes capping over-limit fees at one per billing period, allowing no interest charges on fees and no fees to make a payment. The legislation also would prevent companies from raising interest rates at any time for any reason and limit aggressive marketing by card issuers aimed at borrowers under 21. Obama is expected to tell the executives today that he wants to go further than the House bill without specifically endorsing all of the provisions of Dodd's bill."
OurFuture.org's Bernie Horn reminds us of the history of credit card regulation: "...progressives are not trying to impose regulation, we’re working to restore regulation (That message framing makes a substantial difference to American voters.)"
Climate Hearings Kick Off With Recycled Lies
Grist's Kate Sheppard sums up the first House hearing on clean energy/climate protection legislation: "The first full day of hearings on the proposed Waxman-Markey climate bill found Republican members repeating thoroughly debunked claims about how much a cap-and-trade plan would cost American households, even as leaders from some of the country’s biggest companies joined the EPA administrator in arguing that limits on carbon would benefit the country in the long run."
The Hill adds: "Point-by-point, Democrats marched against and attempted to refute each of the objections leveled by the Republicans. Hitting back at the Republicans' biggest objection -- the concern that America will lose jobs if this legislation is passed -- Chairman Henry Waxman (D-Calif.) asked the panel if they believed that the draft legislation would create jobs? [EPA chief Lisa] Jackson said, 'I believe this is a jobs bill.' [Transportation Sec. Ray] LaHood added that he believed that the legislation would create jobs, 'especially green jobs.' Waxman, who has publicly said he wants to see this bill out of his committee by Memorial Day, said after the hearing that he sees no reason why this timeline will change."
W. Post on Senate Dem hesitance: "A Senate leadership aide, speaking on the condition of anonymity to talk freely, said Majority Leader Harry M. Reid (D-Nev.), who plans to take up a cap-and-trade measure in the summer or in early fall, met this month with eight to 12 Democrats who 'have some concern about going forward' with the bill. "
Politico reports "An environmental group is increasing the pressure to pass a sweeping environmental measure by taking out ads in the home districts of Republicans who oppose the bill. The League of Conservation Voters will advertise in the Michigan district of Republican Rep. Mike Rogers starting Friday, officials at the group said. It will be the second in a series of ads accusing members who oppose the legislation of lacking faith in America. The previous ad attacked Rep. Roy Blunt (R-Mo.)."
Climate Progress' Joe Romm on Obama's Earth Day speech: "...don’t miss his extended discussion at the end about 'closing the carbon loophole through this kind of market-based cap' and trade system. Anyone who thinks President Obama is not serious about passing a climate bill in the next year or so, that he is somehow softening on his campaign commitment, is simply not paying attention."
Wonk Room's Brad Johnson on McCain's hypocrisy: "At His Slush-Fund Think Tank, McCain Attacks Obama’s Cap And Trade As A ‘Giant Government Slush Fund’ "
Interior officially announces new offshore wind rules: "...applications are expected for dozens of proposed offshore wind projects, many off the north and central Atlantic in the coming months ... Salazar said he expects the first electricity production from some of the offshore projects in two or three years, probably off the Atlantic Coast."
Stimulus buying fuel-efficient cars. AP: "Vice President Joe Biden marked Earth Day by announcing that $300 million in federal stimulus money will go to cities and towns to purchase more fuel-efficient vehicles ... State and local governments and transit agencies are eligible to apply for the funds, though they must agree to match half the amount they are allocated. The money can be put toward the purchase of hybrid, fuel cell and natural gas vehicles and finance the infrastructure to fuel them."
Senate Signals Interest in Pecora Commission
NYT: "The Senate signaled a willingness late Wednesday to create a select committee to investigate causes of the nation’s financial crises. In an amendment accompanying other legislation on financial fraud, senators agreed in a voice vote to consider creation of a special commission that would delve into the roots of the collapse."
Financial market overhaul put on slower track. WSJ: "...House Financial Services Committee Chairman Barney Frank (D., Mass.) said he no longer plans to expedite a bill that would allow the government to place large financial companies into receivership. Rep. Frank said in an interview that the complexity of the bill and the fact that his Senate counterparts were poised to move more slowly prompted him to instead decide to package the measure with broader legislation to create a new regulator to oversee systemic risks to the economy later in the year ... The change is a blow to Obama administration officials who have pushed aggressively for these powers, and leaves government officials without new tools to take over teetering companies during the next few months ... Rep. Frank said Congress needed to at the same time create a new 'systemic risk' regulator..."
NYT lays out what will be discussed at Friday's banker-govt meeting: "At the meetings on Friday, regulators plan to hold discussions with all 19 lenders, minimizing the negative stigma if only a handful of banks were called in for meetings while giving them a chance to address any questions they may have about the data. Officials have said that at least a handful of the 19 banks undergoing the exam will need to raise sizable amounts of fresh capital, a move that will severely dilute existing shareholders. For the tests to be credible, regulators recognize that not all of the banks can pass the exam with flying colors. Banks will be given the chance to raise money from private investors first, but the fragile condition of some institutions and the short timetable before the results are made public make it increasingly likely that they will return to the government for money."
Fortune explores TARP payback issue: "The American Bankers Association trade group last week sent Treasury Secretary Tim Geithner a letter calling for the government to eliminate the warrant-repayment provision altogether. The ABA said repurchasing the warrants amounts to an 'onerous exit fee' for banks that have already repaid in full the funds they got from Treasury ... skeptics of federal bailout plans are warning that TARP amounted to a huge subsidy to already powerful financial sector insiders. There's little doubt that a decision to ease warrant-repayment terms would cause further outcry."
Low participation in TALF sparks mixed assessments. W. Post: "In its first two months, the government's signature initiative to support consumer lending has fallen well short of expectations, deploying only a fraction of the amount officials had hoped to extend to stimulate auto loans, student loans and credit card lending. The slow rollout of the program has frustrated staff at government agencies working on the effort and diminished hopes that they could engineer a rapid return to healthy lending levels ... Even without widespread use of the program, consumer lending has improved somewhat in recent weeks, and there are signs that the economy's free-fall is ending, raising questions about whether the program will ultimately be needed to get the economy going again ... some private analysts and government officials attributed the improvement in credit availability in part to the mere existence of the program, which has bolstered confidence."
Senate May Pass Public Health Plan Option, But What Kind?
NYT says simple majority vote in Senate on health care reform "carries high risks," fails to identify them. "A health care bill written mainly or entirely by Democrats would almost surely create a new public health insurance program, to compete with private insurers. ... 'If Democrats push a health bill through the Senate using budget reconciliation procedures, the bill would lack Republican support and would lack the support of key constituencies — certainly the business community,' said E. Neil Trautwein, a vice president of the National Retail Federation, a trade group. 'Health care reform would crater for this year.'"
(Uh, actually that would mean health care reform passed this year.)
Wonk Room's Igor Volsky critiques Reinhardt public plan compromise proposal: "Getting providers (and insurers!) on board with the public option is no small goal, but promising higher payments sounds a bit like a government subsidy a la Medicare Advantage ... wouldn’t a bargaining process that forces private insurers to consider the price of the competitor have a greater impact in lowering overall costs?"
Change.org's Tim Foley also criticizes Reinhardt: "...make the public plan run with its shoelaces tied together. So much for a level playing field."
W. Post's E.J. Dionne advocates for public plan compromise: "Should public-plan advocates block any bill that doesn't contain their idea, as originally conceived? Of course not ... payment rates to both doctors and hospitals could be set at similar rates in both public and private plans to make sure that private insurers weren't driven out of business. Another possible compromise would be a bill that did not include a public plan as such, but instead provided a 'trigger' that would bring such a plan into being if insurance costs went too high or if coverage rates were too low."
Mortgage Reform Roadblock
CQ: "Senate Democrats appear to be running out of options for finding a broadly acceptable compromise on mortgage legislation they are negotiating ... There remain potential ways forward for a deal — most notably limiting the legislation to apply to only subprime and non-traditional mortgages, something most groups opposed to the legislation have agreed would make it more palatable to them. A bipartisan group of moderate senators pushed for such a provision early in the negotiations. But consumer advocates have largely dismissed that option, noting that much of the subprime market disappeared with the implosion of the mortgage market. That leaves, advocates say, a broad application of the bankruptcy provision as the only way forward ... Without an agreement from the major banking representatives ... a deal that could attract the 60 votes needed to overcome a filibuster in the Senate appears unlikely."
HuffPost reports Sen. Tester won't support mortgage reform: "Sen. John Tester (D-Mont.), a key vote on the banking committee, dealt a blow to the bill Wednesday, telling the Huffington Post that he is 'opposed to cramdown.' He went on: 'I just think a deal's a deal. I have a lot of empathy for folks who tend to get led astray, but I just think it's going to create some problems - pretty obvious, actually. I don't have to list them. I'm generally opposed. I don't think it works well.'"
McClatchy on new predatory mortgage lending bill: "To prevent more bad mortgages from being approved, two North Carolina representatives — Democrats Mel Watt and Brad Miller — are again pushing a 'predatory' lending measure. The bill, based on North Carolina law, aims to do a simple thing: Make sure that homeowners can afford their loans ... [it] would end bonuses for brokers who steer borrowers into higher-priced loans. It would require brokers to confirm borrowers' income, and it would prohibit brokers from making new loans or refinanced loans that don't offer tangible net benefits to borrowers ... consumer advocacy groups and mortgage industry representatives will testify about the bill Thursday before the House Financial Services Committee ... A committee vote could come as soon as next week, with a full House vote to follow."
Chrysler Negotiations Continue
NYT on the "chasm" between government and Chrysler bondholders: "Under the terms of the new plan, presented Wednesday afternoon [by our government], Chrysler’s lenders, who hold about $6.9 billion worth of debt, would receive about 22 cents on the dollar, or about $1.5 billion. They would also receive a 5 percent equity stake in the reorganized company ... That is an increase from the government’s original proposal ... But in a plan presented to the government on Monday, the steering committee of Chrysler’s lenders sought at least 65 cents on the dollar, or about $4.5 billion, and a roughly 40 percent equity stake in a restructured Chrysler ... Chrysler’s lenders have also said that the U.A.W. should be forced to accept greater concessions. The U.A.W. has tentatively agreed to allow Chrysler to use stock to finance half of a $10.6 billion fund for its retired workers’ health care obligations."
NYT on union role: " the union appears to be waiting, as it often has in the past, until closer to a deadline to act. That deadline is the end of April for all parties to come to an agreement on a business plan that gives Chrysler a shot at survival. Without that, the government is loath to lend the company more money, in which case it will have little choice but to file for bankruptcy. Of all the parties in talks over Chrysler’s fate, none has more to lose in a bankruptcy than the U.A.W. A bankruptcy filing would jeopardize the union’s painstaking efforts to get financing for a health care trust to cover the future medical bills of 81,000 union retirees and surviving spouses."
WH wins first military spending battle, more to come. AP: "Gates quietly won the first skirmish ... when Lockheed Martin Corp. said Tuesday it is accepting Gates' decision to stop production of over-budget F-22 fighter planes ... Obama wants the war funding bill on his desk by Memorial Day. But first it must wend its way through Congress, where old-guard lawmakers like Rep. John Murtha, D-Pa., are poised to go to bat for Boeing. They are likely to add about $4 billion for 15 of the giant C-17 cargo planes that have been ferrying heavy equipment and troops since 1991. Gates is recommending killing the program after currently funded planes have been built."
USA Today editorial board rips Senate estate tax cut: "The move to cut the estate tax is a mind-boggling testament to some lawmakers' lack of seriousness about fiscal responsibility, not to mention their solicitude toward moneyed interests and donors."
New report on need to close education gaps. NYT: "The lagging performance of American schoolchildren, particularly among poor and minority students, has had a negative economic impact on the country that exceeds that of the current recession, according to a report released on Wednesday. The study, conducted by the management consulting firm McKinsey & Company, pointed to bleak disparities in test scores on four fronts: between black and Hispanic children and white children; between poor and wealthy students; between Americans and students abroad; and between students of similar backgrounds educated in different parts of the country. The report concluded that if those achievement gaps were closed, the yearly gross domestic product of the United States would be trillions of dollars higher, or $3 billion to $5 billion more per day."
Blue Dog on budget conference cmte. The Hill: "House Democrats have included a fiscally conservative Blue Dog Democrat as a conferee in negotiations on a federal budget resolution ... The inclusion of [Rep. Allen] Boyd in the conference could be a sign that House Democrats are willing to budge on the amount of discretionary spending in the budget ... Both chambers are supposed to pass a final resolution before lawmakers consider spending bills in May. House Democrats, however, don’t expect the conference to take that long."
Terrance Heath contributed to the making of this Breakfast.
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