Consumerist Interviews Goolsbee On Credit Card Reform: Part 2 of 4
In the 2nd of our 4-part interview series with President Obama's Senior Economic Adviser, Austan Goolsbee, on credit card reform, we ask, what about the kids? Specifically, what is this bill going to do about those guys giving away shirts on campus in exchange for signing up for credit cards? Because these seems a really great service for college students, who, as we know, frequently go shirtless. Also, how one side of the debate on credit cards is essentially arguing that if you didn't want to get carjacked you should have taken the bus... because an honest business model and a profitable one needn't be mutually exclusive.
Ben: Ben Popken, Meghann Marco here with Austan Goolsbee, senior economic advisor to Obama and we're gonna ask him about credit card reform.
Meg: Is this bill gonna stop those guys who give away the free t-shirts in college? Because, as you know, college students are frequently shirtless, and they this resource. So how is that going to affect college students?
Austan: The issue of students, and not just students, young people of all types and access to credit is a very vexed issue, as we all know. On one hand, there are a lot of people who are really… credit constrained when they're young, and they would like to have access to borrow money, and don't want to be forced into borrowing from even worse sources of credit. At the same time, the credit card companies it's clear have engaged in some pretty over the line practices. At the least, we need to start by agreeing that there ought to be sensible underwriting standards for young people. You know, there are a series of things that are alleged, like credit card companies making gratuity payments to the leaders of universities in order to get them to sign them up as the only credit card company. There are a variety of things we ought to look into, because I think it's a pretty serious problem if you got people coming out of school, usually already in heavily indebted situations, just as the nature of having to pay their tuition. They got access to credit and they can do deceptive practices and be put in a very bad situation that it takes them years to really recover from.
Ben: Some are arguing that if we increase regulation, the current card companies are going to have to decrease the amount of credit that's available to be giving out to people, which with the case of kids it sounds like that's probably a good thing. But also for those who have credit, it may make it more expensive for them. Is there a concern that with this regulation, it might push people, if they can't get access to credit, they could be pushed to other things like payday loans, overdrafting their checking account, loan sharks?
Austan: We do want to make sure that people have access to credit, and they aren't being pushed to loan sharks, and they aren't being pushed to pawn brokers or something that's even worse than what's happening on credit cards. That said, you hear from, you know, American Bankers Association or other industry spokespeople the argument that "well, if we can't charge you the 15 billion dollars of penalty fees, then we're gonna have to charge you the money some other way, and you don't want us to have to charge you some other way." Look, the credit card companies have made huge profits in recent years, and a lot of those profits have come from deceptive practices. And they shouldn't be doing those practices. And if we're going to choose between two models, one in which they say, "these are our true fees, and these are our true interest rates, here is what you actually will pay," and alternative B is they say, "You're not gonna have to pay anything, and you sign up for it, and then you start getting bills, and you have no idea what the heck is that? Between those two, the first one is by far the better system, and I really don't think that we have to choose between honesty and a viable business. I think it's just not true. And we've kinda gotten into this scenario where they say, "This is a carjacking! Well, you know, if you didn't want to be carjacked, you didn't need to take your car, you don't need to be driving, and you should've locked your windows and, you know, made them bulletproof." That kind of logic pushes you the wrong way. I mean the loans of credit cards are by far the most riddled with these kind of criticisms, and complaints to the Better Business Bureau and to Consumerist and wherever, they're much more so than other forms of consumer credit, small business credit.
Next: Part 3, Part 4.
Previously: Part 1
Keep track of the entire 4-part series as it rolls out at consumerist.com/tag/interviews/goolsbee.
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Comments:
@pippenz: Washington can be rather warm and humid in May. Also, the strong camera lighting can make for an uncomfortable interviewing environment.
Ben, why does your jacket have an extra pocket?
Minor annoyance, but Ben, it's PRESIDENT Obama, not just "Obama".
Excellent job so far though.
@badhatharry: It's called a "ticket pocket" - most often found on better-made suits! The single-breasted peak lapels on Ben's jacket is another nice detail!
i like the shots cutting back to ben and meg, looking interested but also awkward. hahaha.
this is all pretty neat. woo, credit card reform! as one of those college students about to graduate with hella debt in a few years, i'm stoked.
I like this interview series. Good job hope the next one is released soon.
Am I the only one who keeps reading this guy's name as Googlesbee?
Marry me Meghann Marco!!!
Yeah, that's not creepy at all.
@Skellbasher: Considering the last president was frequently referred to as 'W', I think 'Obama' is fine. :)
You know, for a video on credit card reform, these are actually pretty funny. Desiccant lungs and carjacking protection.
Now to go figure out what the hell everyone is talking about with this credit card reform business.
@Coles_Law: "Considering the last president was frequently referred to as 'W'"
If not worse...
(P.S. - I really need to figure out the quoting system on here)
so, what's the answer? t-shirts or no t-shirts for poor shirt-less college students?
let me tell you, after watching "cops" last nite, i wish they'd legislate mandatory free t-shirts with every new credit account.
Does Consumers Union and Consumerist.com serve only the hearing audience? Closed Captioning/subtitles would be nice to follow along and be informed the same as anyone else. Especially it being government official doing the interview.
After watching the previous one and this one, I don't understand the point. You are not challenging Goolsbee on any of his answers, and if we only wanted to hear the political party spin we could go to the white house website.
For example, Goolsbee wrongly dismissed the very real argument that credit cards are not mandatory for anyone and that its up to you to read the voluntary contractual agreements you enter into. This is dismissed with a completely inapplicable example of "oh but thats like saying you should have locked your doors if you didn't want to get carjacked."
No, no its not.
No one signs up to get carjacked. Carjackers don't hand you a detailed contract explaining exactly what they are about to do and ask you if you agree and sign before carjacking. Its a horrible example, and it completely misses the real point that "credit card reform" is just a code word for government trying to "protect" those who who make bad decisions and harm those who make responsible decisions.
@Ben Popken: Updated with this new information, I'm struggling mightily to come up with a new wrinkle on "playing pocket pool".
Ben, you have a very comedic face. Have you ever thought of acting or getting an agent?
I am being totally serious. I think you should consider it.
@Ichiro51: No. No! It is clearly a custom pocket Ben had added to store crackers in. Interviewing someone is a hunger-inducing process that requires constant nutritional input. In the form of saltines. From a cracker pocket.
"No one signs up to get carjacked. Carjackers don't hand you a detailed contract explaining exactly what they are about to do and ask you if you agree and sign before carjacking."
Credit card companies notify you of changes to your signed "contract," and defend themselves by saying they wrote that right into the initial contract you "signed." How is that not like carjacking?
Does anyone know if they are going to add protections for the Check Cards, AKA fake credit cards?
Like if your Check Card get charges placed on the card that goes over your account balance the bank then turns around and lets the charge go trough on your account, to then turn around immediately charge you for over draft for each time it is tried.
@thebigbad: Good luck with that, she probably makes less than a first officer for the airlines.
[consumerist.com]
@Dusty O'Connell: Um, carjackers send you a mailed notice of their right to change the terms of their carjacking you, and if you disagree you can discontinue the carjacking agreement? Wow, you must be working with some very nice carjackers.
The metaphor is absurd. You signed a contract which stated it could be changed and the terms under which it could be changed. Comparing that to carjacking is comical.
Personal Responsibility,
My wife and I have, some might say, acted irrisponsibly with credit cards in the past. However for hte past 2 years we have been working diligently to pay off all of our debts, and just recently saw are interest rates increased on one of our remaining accounts. Because of the current "Credit Crisis" none of the other banks that we have contacted has been willing to give us credit so we can transfer the balance off to a card with better terms. So because I am trying to do the right thing and pay off the debt that I have accumulated I am being penalized, and the banks reason for raising my rate "the amount of the payments I was send was too low in relation to the balance on the account" OK but I have been making MORE than the minimum payment for the last 12 - 18 months, and I have not missed or been late on a payment in more than 48 months. So esentially because they were not happy with the amoutn of money they were getting on a monthly basis they raised my interest rate so they could get more money. Dont come on here and saw that the problem is all about personal responsibility, I have taken responsibility for my past actions and am simply trying to pay my way out, but with the CC companies constantly jacking up rates for no reasonable reason at all instead of this being a 3-4 year plan to get out of debt it will become a 5-6 year plan with thousands more being paid in interest. I understand penalizing people for not paying, paying lae, etc but I have a sterling payment history and have had this account for 17 years without ever having an increase in my rate. REFORM IS NEEDED.
It is like carjacking in this economy, the banks know that people are going to be hard pressed to find a bank to transfer the debt to at this time, so they increase the interest rate and hope you cannot find a bank to transfer the debt to. In most cases the banks win because you are stuck in a agreement with an incresed interest rate and cannot find another bank willing to take on the risk in the current "credit crisis" so in essenece you are now a hostage to that bank until the credit markets thaw a bit and you can find a way out.
@sonneillon: Ummm...? She won't marry him because she supposedly doesn't make a lot of money? Or he shouldn't marry her because she doesn't make a lot of money? Perhaps you should inquire about her dowry first.
And why does it always come down to something about how the female looks when there's a video posted?
@ShreyashiPartridge: Looks, sadly no it wasn't about looks merely the mercenary approach I take to weddings.
Haven't watched the vid yet, but just thought i would kick it off with a "Wow, they look hot"
:)