Who's the Bull, and Who's the Matador Here?

Photo by pasotraspaso

This one wasn't hard to predict: credit card issuing banks are already making lemons out of lemondate with the new regulations aimed at curbing abuses. Business Week reports (no link available) that issuers are expecting new fee income (especially from cardholders who pay off their balances in full every month or don't use their cards very often) to more than make up for the losses caused by the new regs. Prohibit them from raising rates without 45 days' notice, and they all switch to variable rates (jumping throung one huge loophole in the regs). Prohibit marketing to college students "near" campus, and they set up tables two blocks away, say near a fraternity or sorority house. For those of us teaching commercial law and regulation, consumer protection, and administrative law, this is one more chapter in the saga of regulators' introducing rules that both fail to curb the real abuses, as well as increasing the abusive potential of the work-arounds put in place by the industry. When are we going to learn?