Here's Ben Bernanke in 2005, just before becoming the new Fed Chairman, not too worried about a housing bubble:
"House prices are unlikely to continue rising at current rates," said Bernanke, who served on the Fed board from 2002 until June. However, he added, "a moderate cooling in the housing market, should one occur, would not be inconsistent with the economy continuing to grow at or near its potential next year."

Here's a video from June, 2005, where Peter Schiff, President of Euro Pacific Capital and free market advocate, saying our economy was "basically a bubble" and not viable:
[www.europac.net]

So, who do you listen to for economic advice, and what were they saying about the economy?

If it's unprofitable to lend to you at 15% I'm okay with you not getting credit. This does not hurt me as a responsible borrower at all, in fact it would result in lower rates for me because even on the retarded-interest-rate cards, the credit card companies ARE hurting from defaults. Thus without as many losses from defaults they could offer more competitive rates to those who DO have decent or good credit.

@econobiker: If not an alternative party, at least term limits.

@TEW: Oh but businesses cried "people were abusing the system, wawawa". Sure people with medical and unemployment debt were abusing the system... The 2005 Bankruptcy Reform act was just businesses wanting to eliminate ways for consumers to get out of crushing debt...

@giggitygoo: All the more reason to vote for an alternative political party. But the two main parties have created a system (for instance Commission on Presidential Debates) that excludes alternative parties from the processes.

Now only if the mass media (tv/radio) would just stop suckling at the money milk of these two main parties and actually create legitimate, non-partisan reports on alternative political parties (versus "3rd party as a spoiler") we would see more folks informed...

Alternative party politicians would have really stuck it to the businesses which created this morass...

Well actually, while the entire crisis can't be blamed on government, (Financial companies' horrific risk management practices certainly was half the problem) but government has some blame here also. Everyone likes to bring up the CRA, but it goes beyond that. Over the past couple decades, the government gave Fannie/Freddie "goals" to lend trillions of dollars with 40-50% or so to sub-prime/Alt-A mortgages to further their goals of expanding home ownership. Of course these goals were met happily by Fannie/Freddie, since the government implicitly (later explicitly) backed all this money they were putting into the mortgage market. There's no question that these additional trillions of dollars inflated the bubble and helped get us to where we are today.

I realize this topic always descends into partisan bickering. Without sounding all Kumbaya, both political parties have blame as well as both government and corporations. Republicans like GWB were just as bubble inflating with his "ownership society" as was Clinton and Carter. Everyone (almost) seemed to think expanding home ownership was a good idea until this mess. Also, while government created the bubble, the financial companies jumped right on board as soon as it seemed that the risk could be controlled and the market profitable. They massively screwed up their risk management and probably deserved to go out of business, even if it wasn't practical. Now, flame on!

Whenever a credit card company tells you it's raising rates because of the current economic situation what they're really telling you is you have no where else to go so there going to bend you over and take you for all they can.

this regulation is necessary because the goverment didn't do there job in regulating the size of these companies. they should not have been able to get as large as they did.

@Coles_Law: If anything, I'd have supported extending the military interest rate cap to everybody. But then, that's a much higher interest rate cap, mostly aimed at payday loan places.

Basically, excluding late payment fees, it sets the cap at 36%, including any fees as interest.

What did the payday places do? Said sorry, we can't serve military any more.

DOWn, baby, DOWn!

to use your words: "Please back up this propaganda with facts."

since you were so busy doing "real research in the past 12 months", you should have no trouble coming up with that.

@Eyebrows McGee (popping ~May 29): Political propaganda - those of us who did real research in the past 12 months know what happened was CAUSED by government regulations, specifically regulations REQUIRING lending to those who should not be taking out loans.

@supercereal: No I'd say the vast majority agree with you, its just that 95% of consumerist commentators are rabidly in support of subsidizing dead beat consumers and assaulting responsible people.

Good. It should have failed. Responsible consumers should not have to subsidize those who cannot or willnot pay their bills off every month. Rate caps do just that by causing lower credit limits and lower credit card rewards for the responsible.

But now that the government seemingly has an infinite supply of free money these days (despite calling it all "loans"), I can't stop them from wasting it on undeserving entities.

The law I would like to see repealed is the bankruptcy reform act of 2005. I have no problem with high interest rates but that act has made bankruptcy extremely difficult. I know I will take heat on this but bankruptcy is needed for the markets to run smoothly. Also this cap the rates at 15% is pure crap. It does not solve the problem of people not being able to pay their bills and it won't hurt the CC companies much because they know you will be in debt for a long time. BTW I am a free market works person.

Not that we need a 15% cap, but the rest of us think the government needs to "interfere" with the lending industry because we've been reading the news for the last 12 months or so. Or did you miss all that awesome lack of regulation hitting the fan?

@runchadrun: you sir have good credit...congrats. But if you had a poor credit history you would be charged 155 and/or have no line.

@TalKeaton: If rates are capped, credit lines will be limited to only those people with very good credit scores and credit history. All others will be excluded.

New credit could to be established via secured cards but its kinda sad to borrow at 15% from yourself with the bank keeping the interest.

Additionally, Credit Card compaines still want to make money so they could reduce rewards, reduce/elimnate grace periods, increase interchange (which results in higher prices).

In the end those with good credit and good credit habits will fund the behaviors of those that have poor credit habits.

@supercereal: The problem is with the current legislation (or lack thereof) there's no incentive for credit card companies to maintain lower interest rates. Sure some cards have "guaranteed 3% for three years" promotions, but they still see one late payment as an excuse to bend you over because that's what all the other cards are doing and hey, you already have their card.

@ADismalScience: Well said. I was surprised they aimed that low on the percentage cap.

Though I'm probably the only one around here who thinks the defeat of the bill is a good and logical thing...

1.) 15% is utterly arbitrary. There is no basis for this interest rate as the standard. The Fed's target rate has been higher for banks, for christ's sake.

2.) 15% creates problems for default rates and other mechanisms that allow lending to profitably occur to higher-risk borrowers.

(And to clear up a misconception: if you are a high risk borrower - young, recently bankrupt, etc. - that doesn't mean you're a bad person! It just means that the actuarial science used to determine your likelihood of defaulting necessitates more fees to compensate for risk. High-risk borrowers never wind up paying those rates if they're good customers that pay on time. This strictly nails deadbeats, late payers, forgetful people, etc. You know, the folks you wouldn't be sympathetic to anyway.)

3.) The bill was a political stunt, generally, and wasn't even lobbied against aggressively.

no, wait, that one was real.

@rpm773:
riiiiiiiiight

Hope you have lots of stock in KY because that shit's gonna be a in high demand if this thing gets knocked down.

@metsarethe...: ....and I can think of a lot of people I wished didn't have access to credit.

Ya' mean he couldn't compete with the $100s of millions spent by credit card companies over the years to eliminate usuary laws and maintain the status quo by lobbying politicians????

Who would'a thought?

@unpolloloco:
you say that like it's a bad thing, the people who are usually affected by high rates could do with a lower limit.

That's right; we're still a state.

Alright, that said, I really don't understand the Senate's opposition to this. Could someone enlighten me on the negative aspects of this bill?

further proof most of the senate is bought and paid for in full by special intrests...

why shouldn't credit cards be held to the same standard as credit unions?