The financial services industry pumps a huge amount of money into politics. So much so that the industry has special status and gets pretty much what it wants. Things are a bit different now, because the downturn in the economy and mortgage screwup has given Washington some leverage to examine some of the industry’s worse practices, and look at what happens–
Imagine that you were invited to Washington DC to testify at a hearing on the “Credit Cardholders’ Bill of Rights.” You travel to Washington, probably on your own expense, to share your frustrations with the one-sidedness of credit card contracts and policies, only to learn that you can’t testify, unless you:
…would sign a waiver that would permit the credit card companies to make public anything they wanted to tell about their financial records, their credit histories, their purchases, and so on. The Republicans and Democrats had worked out a deal “to be fair to the credit card lenders.” These people couldn’t say anything unless they were willing to let the credit card companies strip them naked in public.
That craziness is Professor Elizabeth Warren, a Harvard Law faculty member who has been very critical of the financial services industry and their denialist lackeys. I’ve never heard of a legislative witness having to give up their credit card and bank statements to the public in order to discuss an issue.
In light of this requirement, Warren asked that the credit card companies be subject to similar terms!
…During the preceding 3 1/2 hours the credit card issuers had repeatedly made various factual statements about their practices, their customers, their revenues and so on (e.g., “College students have the same default rates as our other customers,” “98% of payments are made for free,” or companies raise interest rates “to control risk, not to increase profits.”) So I asked if the credit card companies were going to testify to such factual statements, would they be required to produce the data to back up the claims so that we could all see it and evaluate it. Katie, Adam, Larry and I all used public data and footnoted our work. Surely it wouldn’t be fair for the credit card companies to make factual assertions that no one could challenge because no one else had any access to their underlying data. If the new rule is that everyone has to release everything so others can challenge it, when the card issuers want to testify as to “facts,” shouldn’t hey have to back up their claims by showing us the numbers?
I never quite understood the Congressman’s reply. I’m still waiting to find out what fair-is-fair really means.
This is a great point. I was always a bit disappointed in industry testimony, because they make big points without bothering to provide a footnote, while proponents of reform write substantial critiques, fully footnoted. But when you have the big money that the banking industry has, that doesn’t seem to matter–to republicans or democrats!