Jason Rines (iThinkBig)

New Limits on Credit Card Companies: Is Hell Freezing Over?

The U.S. will come to relearn the meaning of a 'value proposition'. I lived by the rules and my fundamental VC training and offered a strong value proposition for my businesses. My reward is survival and soon thriving. I love it when there is no competition left :)


On Dec 22 12:27 AM DrChaos wrote:

> <i>By limiting banks' ability to manage risk, regulators would be
> forcing the institutions to withhold credit, raise interest rates
> or eliminate such programs as zero percent balance transfers to compensate
> for it, industry officials and analysts said.</i>
>
> That is a heaping load of pure bovine scatology.
>
> The issue is not managing risk---it is stopping clearly deceptive
> practices. It is preventing bank's ability to fool customers into
> thinking they have a good deal when they don't. Nobody would stand
> for it if buying a car was infiltrated with such flim flam, even
> if there was an impenetrable 30 page "disclosure" form. Banks love
> disclosure requirements because they can stuff absolutely everything
> in there from the mundane to really critical, and nobody can discern
> which is important and what is legalistic mumbo-jumbo.
>
> Banks will have the ability to price risk the old fashioned way:
> credit lines and interest rates. Sure, the front page interest rates
> will likely go up---and this means that the cardholders will have
> much clearer ways to compare one offer from another. They will go
> to the bank that actually does offer them the best deal, not the
> footnote-encrusted best* deal***.
>
> That's the real reason some banks don't want this, as they will have
> to face honest competition and consumer pushback. Of course, all
> banks will be in the same position, and honest nicer ones should
> approve this move.