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Thursday, April 30, 2009

To Congress, a "Bill of Rights" Is To Protect You From Your Own Choices

Silicon Valley Congresswoman Anna Eshoo (D-CA14) today hailed the House's passage of a "Credit Cardholder's Bill of Rights" -- but it did nothing other than place new restrictions on what kinds of credit card contracts that a consenting adult is allowed to agree to.

If the bill becomes law, credit card consumers would no longer be free to
  • agree to contracts that enable lenders to offer lower initial interest rates by reserving the option of raising interest rates (with due notice) on the card balance when interest rates change in the overall economy.
  • agree as a student to a credit line greater than both $500 and 20% of the student's income.
  • agree to any credit card contract with provisions printed in less than a 12-point font.
  • borrow more than 25% of a credit card's limit in order to pay the first-year fees on that card (that typically allow the card to offer a below-market interest rate).
Eshoo also claimed the bill "will put a permanent ceiling on credit card interest rates". No evidence of such a ceiling was in the text of H.R. 627 that was available online this evening, but it may have been amended today before passage. The bill's author, Rep. Carolyn Maloney, has long bragged that it "contains NO rate caps, fee setting, or price controls", but it turns out that may have been bait-and-switch. Instead of updating a law called "Truth In Lending" to further restrict the choices of consenting grownups, perhaps these politicians should work on something called "Truth In Legislating".

In the minds of Maloney and Eshoo, a "Bill of Rights" is something that protects grownups from their own choices. To use the "Bill of Rights" label in this way is to mock our real Bill of Rights -- the one designed to protect citizens not from themselves, but from people like Maloney and Eshoo whose edicts are enforced by men with guns.

[LTE submitted via CapWiz to:
  • Palo Alto Daily News
  • Palo Alto Weekly
  • San Jose Mercury News
  • Silicon Valley Community Newspapers]

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