Credit card 'protections' versus bank bailouts

Maybe it's just me, but the federal government has done 'stress tests' of banks to see what kind of assets they need to have to remain viable. They've also bailed out many banks who were deemed 'too big to fail.'

Almost all banks offer credit cards on which they make a profit (if they didn't make a profit, they wouldn't be offering them). That profit comes from interest and fees that they impose, charging higher fees/interest to those with riskier credit - a common practice everywhere.

The federal government (because it's such an expert at living within its budget and ensuring enough income to cover its debt) tells banks they need to have more resources, assets and income.

But they also tell the banks that they're charging too much in fees and interests on their credit cards and that they need to change/reduce those charges. This will reduce and, in some cases, eliminate certain profits that the banks rely upon for profitability.

These two actions are in direct contradiction.

How does this make any sense?

Random Thoughts on a Sunday morning

* President Obama has said he wants reforms for credit card contracts. He wants protections that "forbid abusive fees and penalties" and said that plain language should be used. "No more fine print, no more confusing terms and conditions. We want clarity and transparency from here on out."

Can he please start first with the IRS and apply these conditions to them - and then to Congress?????

* The Blade editorial board has slammed the Ohio Supreme Court for upholding the confidentiality of attorney-client privilege and exemptions of such correspondence from Ohio's public records law. This was a ridiculous position for The Blade to have taken and they deserved their ruling. While their motives have nothing to do with the Court's decision, the only reason they wanted the report released was so that they could continue to attack Jim Hartung. It's not enough that the man is no longer the president of the Port Authority - they just want to bury him.

Their penchant for vendettas is part of what has cost them any semblance of credibility. Sadly, it doesn't seem to stop them.

* Can you say "CONTRADICTION"?

This past week, Lucas County Commissioner Ben Konop asked the Warren County Commissioners to send him the stimulus funds they don't need and want to return. Warren County responded politely, telling Konop that such a decision would defeat the purpose of returning funds in the first place. (Read the correspondence here.)

Konop's statement upon receiving the response was, in part:

"...I will not get into a right-wing-radio-fueled, Rush Limbaugh-esque debate about taxes. Now is not the time for political posturing. Our job losses are real. Our home foreclosures are real. Our challenges are real. Despite Mr. Kilburn's objections and rejection, I will continue to fight for every dollar out there to provide the services our taxpayers deserve. Also, I will not apologize for, nor will I stop, pursuing every angle to put our citizens back to work. ..."

But just two days later, Konop, contradicts himself:

In a prepared response, Democratic opponent Ben Konop said he saw "a troubling pattern" - a reliance on taxpayer dollars "that don't exist."

So when you're slamming a campaign opponent, you oppose using tax dollars that don't exist, but when Warren County Commissioners tell you that the stimulus funds you want to take from them are tax dollars that don't exist, you don't want to discuss the issue? Unbelievable!

Konop also said:

"Now is not the time for pie-in-the-sky proposals," Mr. Konop said.

You mean, like having trash collectors serve as crime fighters? Or subsidizing loans so people can buy art? Or participating in fake food stamp challenges? Or using tax dollars to pay for a college education for everyone in Lucas County? etc., etc., etc., ...

Will anyone else call him on this?

* When it comes to Toledo's budget, you'd be hard pressed to find anyone who isn't aware of the massive deficit. Revenue predictions for income tax collections are a major part of the problem, as they are significantly below previous years.

But here's a critical question that no one is asking: Since it is now the end of April, what have the ACTUAL collections been for the first quarter? Are they consistent with projections? Are they higher - or lower? Where do we stand for the first quarter of the year???

Before council acts to raise taxes to address what is projected to be a decline in revenue, can we first get some FACTS about what the revenue actually is? Maybe then they can make informed decisions - for a change.

Unfair credit card practices and terms?

Okay - so maybe I just don't get it, but I fail to understand several things about the Lucas County Commissioner's resolution regarding credit card terms.

First of all, since when did Ohio's county commissioners gain the authority to tell the Federal Reserve what to do? And, other than placating a special interest group that is advocating for changes in the law, is this just a way to pile on publicity for them and for State Treasurer Richard Cordray who is running this year for Attorney General following Marc Dann's resignation?

As for the 'substance' of the resolution, how are credit card terms unfair? If a credit card has a term or rule or fee you don't like, you don't have to continue with that card. If you don't like a change in fees, stop using the card. There are so many credit cards available these days - and many are willing to negotiate their terms or interest rates - so it's not like you have only limited choices.

And if you continue using your card despite your dissatisfaction with the fees or terms, how is that 'unfair'????

Or are they saying that most people who use credit cards are too stupid to understand the terms and impact of the fees or how they work? If that is the case, then the solution isn't more regulation and restrictions on the market, it's to better educate children so they can handle such complicated transactions in the future. But that would require admitting that our public schools (and parents?) aren't educating our kids well enough for them to function in today's world - and we couldn't have that, now, could we?

And if the populace is so dumb as to not be able to understand credit cards, the solution isn't to have government step in with more regulation - maybe, instead, government can ban stupid people from applying for such cards. Or maybe we can just ban stupidity in general?

These kinds of meaningless resolutions have always irritated me and I opposed many such pointless votes when I served as a Commissioner. But with the current makeup of the Lucas County BCC, don't expect such reason and common sense any time soon. Instead, we'll get 'feel-good' actions that do nothing to really help the economic environment in the county.