<- Franken clip.

In the second clip, Sen. Whitehouse asks: "Did you actually read the bill that is the subject of today's hearing?"

Here she uses the big "UC" - that less strict bankruptcy laws have the "unintended consequence" of encouraging more people to seek bankruptcy. Her solution to so many medical bankruptcies is then to make it harder to seek bankruptcy, rather than addressing the underlying over-inflated costs that drive consumers into medical bankruptcy in the first place.

Pharmaceutical companies like Eli Lilly, Merck and Novartis number among The Hudson Institute's funders.

You can watch the entire session and read and search the transcript here on C-SPAN.

(Thanks to Dirk!)

Ahead of President Obama's 2pm address, senior economic adviser Austan Goolsbee released a video this morning making the case for shifting the consumer protection power from seven different agencies and putting them into one, one that is streamlined, clear, and accountable, the CFPA.

From pushing bad mortgages to unclear language to payday lender shenanigans to credit card companies setting the due date at 9am so that if mail happens to come after lunch that day you get a late fee, companies have gotten away with playing fast and loose, says Goolsbee. What we had before, wasn't working, and it contributed to our recent economic collapse.

But what powers will the CFPA have? What is the very first initiative it would take? Is this better government, or simply bigger government?

Watch his video and leave your questions in the comments, or email them to tips@consumerist.com, subject line CFPA. Then, next Tuesday, we'll interview Diana Farrell, Deputy Director of the National Economic Council, get you some answers, and post the video. Deal?

RELATED: Ben & Meg Interview Obama Administration On Credit Card Reform

Here's how it started: A few weeks ago, Betsy McCaughey, a former Lieutenant Governor of New York and the current chair of the Committee to Reduce Infection Deaths, said into a microphone, so she knew it was going out to the public,

"Congress would make it mandatory - absolutely require - that every five years people in Medicare have a required counseling session that will tell them how to end their life sooner [...] The bill expressly says if you get sick somewhere in that five-year period, you have to go through that session again - all to do what is in society's best interest or your family's best interest and cut your life short."

Betsy McCaughey is either stupid like a farm chicken or a very mean person, because either she truly misread the proposal (which makes her sort of unfit to be in any position of leadership, especially one concerning health care) or she is deliberately misreading it in order to terrify senior citizens for political purposes, by trying to convince them that we live in some sci-fi future where they'll be killed by an army of Obama clones. To be clear, the sci-future we do live in has cool smartphones and corporations that use the government to take advantage of private citizens, but it's not Logan's Run. If it were, I'd have already pried out my palm gems and sold them to buy more smartphones.

What the proposal does say is that for the first time ever, Medicare will be required to cover counseling about end of life topics, which is something it never paid for in the past. At minimum, it will have to pay for a session once every five years; if you're really sick, it will pay more frequently. But the sessions are up to you, obviously. The point is, the government will have to help you find out what your options are instead of leaving it up to you to foot the bill.

According to PolitiFact, a spokesman for the AARP said McCaughey's statements are "not just wrong, they are cruel. We want to make sure people are making the right decision. If some one wants to take every life-saving measure, that's their call. Others will decide it's not worth going through this trauma just for themselves and their families, and that's their decision, too."

Consumer Reports has a handy list of tips for how to make those difficult decisions when it comes to "aggressive medical care." The advice is free, politically neutral, and best of all not filled with lies. If you have a loved one who's freaked out by the Euthanasia Menace of Obama, maybe you can read through the list with them and sort out fact from fiction. Then you can make up your mind about health care reform based on the real issues, not fearmongering from idiots.

"Scaring Seniors: Reform opponents spread myths about euthanasia" [Consumer Reports Health Blog]
"Get better care, no matter where" [Consumer Reports]
"McCaughey claims end-of-life counseling will be required for Medicare patients" [PolitiFact.com]
(Photo: fffriendly)

BEN POPKEN: Your name pops up a lot in articles. You seem to be one of the few people with an insider perspective willing to go on record about these issues.

AVIVAH LITAN: That's because I work for a third-party unbiased research firm.

BEN POPKEN: That always helps. (both laugh)

AVIVAH LITAN: Yeah, it does. That's what we're paid to be, third party unbiased observers. That makes it easier to talk.

BEN POPKEN: So, what are the five pieces of personal information you should never give out?

AVIVAH LITAN: My bank account number, my password to anything, my debit, check card number and my PIN. After that, almost everything's public anyways. The politically correct thing to say is your SSN but we'll get to that one later.

BEN POPKEN: I notice you didn't say mother's maiden name.

AVIVAH LITAN: It's so public anyways, people can find it out or they've stolen it, they've phished for it. I would've gotten to mother's maiden name after SSN. PINs and debit card numbers and bank accounts and passwords sell for a lot more on the black market than social security numbers and date of birth mother's maiden name, what we call full identity records. A bank account you can get $100, or sometimes up to $1000, depending on volume and what kind of information you have, and how wealthy the individual is. An identity record is like $10-$20 depending on volume. Credit card numbers are a few cents now, up to ten cents. The market price reflects the danger to the consumer.

BEN POPKEN: Paint me a worst case scenario. Your wallet gets stolen, and it had your social security card in it along with driver's license and your debit card. If I'm a dedicated thief, what could happen?

AVIVAH LITAN: The thief could use that info to apply for a new credit card, or a new loan. The thing is, the chances of your bank account getting raided are much higher. Though, it's much worse when someone takes out a new loan in your name. So, they could steal social security number and all that wallet info and apply for a new credit card, change the address, and start racking up the charges and get away with it for at least a month. That is a terrible thing to have happen. But it's even worse is someone steals your debit card and your PIN and raids your bank account. They're not buying on credit, they're raiding your bank account. Then you need to prove to the authorities that you were not negligent that it wasn't you and it's a real hassle to get your money back with debit. To me, that's the worst case scenario.

BEN POPKEN: Why is it that much more dangerous if it's your debit card?

AVIVAH LITAN: There's two kinds of debit, just step back a minute, there's signature debit when you sign the piece of paper at the register and then there's PIN debit, you use that at the register or ATM, and then there's credit cards which are always signature in this country. The reason why signature credit is the least worrisome is because it's protected by something called Regulation Z. It's a federal regulation that limits your liability to $50. Most of the credit card companies won't even hold you liable for $50. They passed that regulation a long time ago, I think in the 80s to get people to you know not be worried and spend a lot on their credit cards. (both laugh) They also have these rules that if there is fraud it generally goes back to the merchant so the bank doesn't eat the fraud.

BEN POPKEN: Right.

AVIVAH LITAN: The consumer doesn't eat it, the bank doesn't eat it, the retailer eats it. So it's pretty easy for the banks to just shift the reliability back to the merchant, and then pay you back, plus you're covered by Regulation Z. When it comes to debit cards, those are protected by regulation E. The rules on regulation E are not so consumer friendly. You have to report the theft generally within 30 days of getting your bank statement. Sometimes up to 60 days. And then there's limits on how much they'll pay you back. Like you have much more, like a $500 liability in some cases.

Now, signature debit is usually protected by VISA/Mastercard rules. If you use your signature debit you have the same kind of protections as under Regulation Z. If you use a PIN then you're not protected by VISA/MasterCard rules. Then you're protected by Regulation E. If you're using the signature debit card the banks get more revenue than they do with PIN debit, so they always want you to use signature. Secondly, there's typically always another party involved. You can't use signature at an ATM so they just shift the liability back to the retailer like they do with credit cards. When you use PIN debit it's typically at an ATM or to get cash back. That money's out the door to the bank and they cant' get it back once it leaves the ATM. They don't have anyone to shift the liability to. (laughs) So when they can't shift the liability to a retailer, they absorb it, and so the rules aren't as consumer-friendly because they don't want to pay for the loss.

And if someone cleans your bank account out with PIN debit , you'll get late fees, NSF fees, it's a mess to straighten out. You may have your mortgage going against it, your health club, a number of bills, and they'll keep charging you NSF fees and late fees. It's a spiraling effect. And you've lost your money too. I've heard many nightmare stories about that.

BEN POPKEN: You have to get it back from the crooks, and then you have to get it back from the thieves.

BEN POPKEN: Was the Social Security Number really ever designed to do all the work we're asking it to do these days?

AVIVAH LITAN: No, not at all. It was designed to register you in the Social Security office. It was never designed to be your identifier. But it's turned out to be the best identifier that these systems have. Because it's unique for each individual. It's not as valuable as you think is because criminals can make up their own SSNs. They know the numbering protocols and what state and date of birth they're associated with. You just have to assume, frankly, that your SSN ssn is out there already. The black market's full of SSNs. What I do, is I have a fraud alert on my credit report. If you're not in the need for credit, then you put a fraud alert on your file.

The truth is the value of a SSN is overrated altogether. I see the data from the banks. If they want to create a new credit record they just make up an identity. It happens at least 50% of the time. It's a lot of trouble to steal someone's identity and turn it into cash. You have to go and apply for the loans, and then get the credit, and then change the addresses, and then buy things that you can sell for cash. Sure, people do that, and it happens in 4% of the American adult population. But it's a lot easier to just steal their bank account and get the money out.

BEN POPKEN: Sounds scary…all of a sudden it sounds like we're standing out there naked on the street. What can you do to protect yourself against all this?

AVIVAH LITAN: The best thing that they can do in that case is bank somewhere that has a zero liability policy in online banking for example. As a precautionary measure I never use my PIN unless I'm at a bank ATM. I check my balances frequentl because if you report something right away you have a much better chance of getting it back. I keep my PC as secure as possible. The best thing you can do is you can use a locked-down browser, meaning that criminals can't get spyware into it.

I don't give anything out to people. If someone calls you and says they're your bank or anyone like that asking you anything at all that's sensitive I hang up on them. Or you could say I'll call you back and call the registered phone number. Don't ever call a number they give you, because there's systems now where they call the criminal's number and they'll route right through to the real bank but they'll be listening in on there cause it's routing through them.

BEN POPKEN: Whoa.

AVIVAH LITAN: It's like called the "vishing attack." You call their 800 number and they route it right through to the bank. So you're talking to the bank but they're listening to the whole thing. And they get your PIN when you type it in.

BEN POPKEN: Basically if someone starts asking for sensitive information you don't want to dilly-dally and feel them out.

AVIVAH LITAN: Just hang up on them. No legitimate company would…if they're smart, I mean they may do that I've seen some really, some good legitimate companies do really stupid things but that's their problem you know you should just I hang up on people like that immediately and I'll call the bank back, you know? It's not like you can't call your bank back. Don't believe anyone that calls you, basically. I'm not kidding! I have had a couple of attacks. "We're from Yeshiva Hospital in Jerusalem and we're a charity and we need your money..." Some of them are so obvious.

Don't fall for anything. A lot of these attacks are delivered through advertising and Google searches. Say you want to buy a lawn mower. And then something will come out in the sponsored links and if you click on it it downloads malware. Don't ever download anything unless you're 100% sure. Another big area is P2P file sharing, like if you share a local network with your kids and they're always downloading music or videos. A lot of sensitive data is stolen that way.

BEN POPKEN: Because the kid will download what they think is the latest Lady Gaga track and it turns out it's actually a Trojan. And then you grab it...

AVIVAH LITAN: That's one reason. The other reason is, the kid opens all your storage files on your hard drive to the crooks.

BEN POPKEN: Oh, right.

AVIVAH LITAN: They can see everything on your hard drive. Actually, I wrote a little note that got a lot of publicity that didn't get attributed to Gartner, which was fine, I didn't want it to, but did you read about the Obama helicopter plans being revealed? That was all through P2P software file transfers. These guys can get sensitive military information because contractors' PCs are compromised by these home networks, tax returns, business plans on corporations... Anything on a hard drive that's been exposed to a P2P network is fair game.

According to Jessica Holzer of Dow Jones Newswires, "Four public relations firms, including Powell Tate and Direct Impact, pitched their ideas for the television spot at a meeting" that was attended by "representatives from the National Association of Realtors, the American Bankers Association, the Mortgage Bankers Association and the Financial Services Roundtable," and organized by the American Financial Services Association. They haven't made any formal statement yet about running ads, but it's obviously being discussed.

The vice president of the American Financial Services Association told Holzer, "We're not considering running ads against anything as much as trying to ... ensure we don't move forward, in the haste to do something, with the wrong type of approach."

If they do create the ads, expect to see them as early as this month. In the meantime, you can get your industry propaganda fix by watching the old Harry and Louise spots:

"Groups Mull 'Harry And Louise' Ads To Sink Consumer Agency" [NASDAQ via TNR] (Thanks to Heather!)

RELATED
"Harry and Louise on Clinton's health plan"

Here's how Obama described it on "The Tonight Show" in March (when he wasn't making fun of the retarded):

"When you buy a toaster, if it explodes in your face, there's a law that says, 'Your toasters need to be safe,' " Obama said. "When you get a credit card or you get a mortgage, there's no law on the books that says, 'If that explodes in your face, financially, somehow you're going to be protected.'"

In other words, it would be sort of a financial version of the Consumer Product Safety Commission—although hopefully if Congress takes the time to create it, they'll also take the time to fund and staff it adequately.

"Obama wants shield for consumers" [CNN] (Thanks to Ben and Neff!)
(Photo: DieselDemon)

While details of such an approach are still sketchy, it would likely involve employees paying tax on a percentage of their employer-provided health benefits. So if Congress decided that all such premiums in excess of $11,000 for family plans would be taxable income, and your company paid premiums worth $16,000 for your coverage, you'd have to pay taxes on $5,000.

Of course, this is only in the discussion phase right now, and there's nothing definite. It's one option being floated as Congress begins to discuss how to actually make President Obama's proposed health insurance reform package a reality. It's also something John McCain proposed last year, and for which Obama criticized him. And look who else has proposed it:

In 1984, President Ronald Reagan floated the idea of requiring workers to pay taxes on employer contributions to their health insurance exceeding $2,100 a year. A Washington Post editorial the following year called the proposal "surprisingly lucrative yet eminently fair," and speculated that "(it) might have helped hold down health care costs in the bargain." But opposition, especially from labor unions, scuttled the proposal.

"Health insurance ‘haves' to pay for ‘have-nots'?" [MSNBC]
(Photo: PhotoDu.de)

TRANSCRIPT:

EXTERIOR: WHITE HOUSE GATES

BEN: Hey Ben Popken here with Meghann Marco, Consumerist.com, we're here at the White House—

MEG:—invited to the White House—

BEN:—to talk credit card reform with Austan Goolsbee, senior economic adviser to Obama. We asked for your questions about credit card reform and we brought them here, so we're gonna find out what's in store for the future of plastic in America.

INTERIOR: CONFERENCE ROOM

MEG: So, as you know, we here at Consumerist, we make our living explaining the perils of the credit card industry to consumers, so why are you guys trying to put us out of business by reforming the credit card industry?

AUSTAN: No no no, we're trying to help you, that's exactly, we've been listening to you for this long and it's clear as the President said, there's nothing wrong with a credit card industry where people can get access to credit, and people ought to pay their bills, but what we've gotten into is this situation where you've got some players engaging in clearly deceptive practices and predatory practices where consumers don't have full information about what they're getting themselves into, and where the industry's made more than $15 billion in penalty fee income last year. So what they've done is just turned what use to be fees for penalties into really a profit center. And we've got to get away from a model like that.

MEG: So we've got a question from Consumerist reader Jason. He wants to know, why can banks be allowed to change APR on existing balances? Shouldn't the new APR only be applied to the balances and purchases moving forward from the date of the change?

AUSTAN: Yes, Jason's totally right, that is one of the central elements in the Obama views, is that in a series of practices like changing the interest rate on money you already, loans you already took essentially, that it doesn't make any sense, that we oughta get rid of that.

BEN: Along those lines, James Robrahn asks, "How's it that the banks are getting billions in TARP funds and then they turn around and they're cutting off people's credit lines and raising interest rates in this time of crisis?" What's going to be done about that?

AUSTAN: When you're in a crisis mode, it's clear financial institutions are pulling in credit in all sorts of forms, that's why the financial rescue was needed, it's been a big effort of the administration, trying to get the lines of credit back flowing, to consumers, through credit cards, to small business, to a whole bunch of areas.

BEN: And what are some of those steps that are going to unlock credit for consumers?

AUSTAN: Well a lot of the steps to unlock credit are more macro in nature, as I said, it would be relatively difficult to go legislate, for the government to go figure out, here's a credit-worthy individual, you should go give them a loan, is much harder. So the things that they're doing is we've go the financial rescue in place, we've had a series of efforts where the government's trying to unlock consumer credit, student loan credit, automobile credit, small business credit, through the buying up of securitization, buying up various investments, which, they've tried to make it more appealing for people to get into that market. It has been met with some success, though we are certainly wanting to expand those markets now.

BEN: Up until now, basically, credit card companies have said, well we don't regulation, we just need more disclosure. So, this is a new change of tactics. So I'm kind of wondering, you know, why don't we take that up? why don't we go with disclosure and do it like they do in Canada and cigarettes? You buy a box of cigarettes in Canada and you have a picture of a dessicated lung on the box and it says you smoke these and you will die. So with credit cards, you put a picture of a family evicted from their foreclosed house and it can say, if you use this improperly, it will lead to your financial ruin? Why doesn't the administration push for something like that?

AUSTAN: Meghann, is he Canadian?

BEN: Clearly. I'm Clearly Canadian.

AUSTAN: The President totally agrees with the importance of disclosure, and disclosure and transparency. Which are related but not the same thing. I mean, I have a PhD in economics, I can't understand a lot what's in the contracts under your credit card, and my eyesight is not sufficient to even be able to read it a lot of the times. So, the President's program is based on plain language, and reasonable disclosure. So disclosure plus transparency's important... I don't think that's all the President's fully on board with that's all let's do. I think he thinks we need that, but in addition, there are certain practices, that, even with disclosure, they're relatively hard to explain, and the credit card companies have engaged in gaming the system so that they just need to be prohibited. So, setting your payment date to be on a Sunday, so that you literally can't pay on the payment date, it either has to come in early or else it's late and you get a penalty fee. Or setting the payment time to be noon, so even if it comes in but it came in in the afternoon oohp! You had a late fee, you add another 15 dollars. So there are a series of practices, be it the form of penalty fees, raising interest on loans you already took out, a variety of other things that the President thinks we need to do more than just disclosure and transparency.

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.

MEG: Ok, this is a question from reader Johnathan. He wants to know, "Why are credit card terms the only contract I can find that are subject to unilateral dictation of changes in terms?

AUSTAN: The credit card companies reserve the right to change the terms. Uh - there are other contracts that have that feature. There are certain things in credit cards which are even more questionable. Like they reserve the right to change the interest rate on loans you already took out. So when you make a purchase, you have a balance, something happens, your rate goes up, they apply it to stuff you already bought. This is a very iffy type of a contract. Similarly, the print is barely readable, the language is not in English, it's in kind of "Bank-o-nese," which you really need a law degree—you probably need more than a law degree. Most lawyers can't even read it. And it gives them the right to administer fees of their choosing, for behaviors of their choosing, and the argument that they give in response when they you get the fee and complain is, "Well if you don't like it you should have read the contract." Or, "You should go find a new credit card." Those two explanations are deeply not satisfying. That's why two central themes in the President's plan are: it's got to be in plain language, and then a second focus of the President's plan is prohibiting certain practices, which are just over the line, like, changing interest rates on balances you already incurred, and things like that.

BEN: That feature struck me in particular because when the bankers defend it they say that they're repricing risk, but as far as I understand, a risk is something that could happen in the future. But if it's already happened, then where's the risk and why are they repricing for it?

AUSTAN: You know, the thing is, getting in the insurance business of insuring things that didn't happen, is a great business. Because it just means you pay us. And that is the situation a lot of credit card companies are in. "Well, you know, we have to be compensated for the risks," but this is already debt, they already took it out! You had a deal at a certain interest rate, and they're going back and changing it. In addition, there are certain practices, that even with disclosure they're very hard to explain. And the view from the Federal Reserve, as well as Congress, as well as the President has been, we gotta address those. So, as an example, if you've got two different kinds of debt, some has a high interest rate and some has a low interest rate. The credit card companies have, and you make a payment, the credit card companies will apply your payment automatically to the low-interest rate one. Leaving you the debt of the high-interest one so they get more money off of you. You can explain, what the Federal Reserve found, is you can explain this to people, but a lot of people still don't quite get what you're saying, so it's far better, it's a far better idea to simply require them to pay down the highest [interest] one first.

BEN: All these different practices you've been describing, it sounds like we're talking about a game where it's rigged for the house from the outset, and the rules are always changing, and you can never know them, and with credit being so important for consumers, and consumer spending driving 70% of the economy, how did we let it get this bad in the first place?

AUSTAN: It's not there's something wrong with credit cards. There's a perfectly viable business that consumers can benefit from, that the banks can profit from... all the President is saying is let's be completely above-board, transparent, and honest with what we're doing, and not engage in certain kinds of practices that are really preying on the lack of knowledge and the lack of understanding on the part of the consumer. Penalty fees to discourage a certain kind of behavior, everyone understands that. Penalty fees where we design it so you can't get out of paying the penalty as a way we're going to use just to make money... now I think we've gone into a space where we don't want to be.

MEG: We have a reader question about going over the limit, which is a big fee that everyone is really upset with. The reader asks, "Credit cards allow you to go over the limit and chare you fees for doing that rather than having a clerk reject your credit card for being over the limit. Isn't there a way to opt out of these services? And shouldn't there be a simple way to do so?"

AUSTAN: It's another one of these tricks is that your credit limit is $10,205. Now, you better remember how much you've spent for the whole month because when you get to that, it doesn't reject it. They just send you a fee that says, "Oh, you wen't over your limit! You didn't know, but you went over it." So the President has said, well we ought to do, for example, is have an opt-out box you can check that says "If I get to my credit limit, reject my thing when I try to buy it!" "No no no, you can't buy it, you're over your limit." This is again one of those "Is it reasonable to expect people to know exactly where they are relative to their limit? And when the limits are changing around unilaterally anyway, strikes me, again, as preying on the lack of information on the part of the customer.

BEN: A lot of our readers are interested in these mandatory binding arbitration clauses, and these class-action waivers. Is Obama concerned about that? And are we going to do anything about them? Because that's another case where we're stripping consumers of their power. Credit card companies are basically afraid to get into a real court with a consumer.

AUSTAN: The thought of thousands upon thousands of people having to go to court to sue to deal with various credit card problems, because you could see that being unappealing, you can see a role for arbitration. On the other hand, a lot of accusations that these mandatory arbitrations are with firms who are representing themselves to the credit card companies as, they are doing double-duty as debt-collection agencies, as well as mandatory arbitration... if you're a consumer going to mandatory arbitration with a firm whose job it is to collect money from consumers, to give back to banks, that strikes me as a difficult situation. It's not an obvious thing. If you ban mandatory arbitration, you will end up with thousands more lawsuits, and that's not obviously in the consumer's interest, but on the other hand I think we do gotta be mindful of some of these abuses.

BEN: Right, another one of those, what seems to be an abuse, or at least definitely a conflict of interest, I don't recall the specific study but they found that basically the arbitrators that were returning judgements in favor of the credit card companies most often got the most business. Will there be space maybe, because obviously what we have isn't working and chucking it is probably not a good idea either, could we see a mandatory arbitration reform bill down the line?

AUSTAN: That's an interesting idea, I was going to say, maybe this is due for a Consumerist expose of this stuff. I don't know which of those is true, I mean, I'm not a lawyer, we'd need to really get the credit lawyers in, to look at this, but I have seen these allegations that you're speaking of, of mandatory arbitration, of the firms selling themselves to the bank as "We never give the customer anything, hire us as your abitrator!" That seems problematic. If that's actually what's happening, it seems like something's ripe for reform.

BEN: I saved our best, our hardest, question for last. And I don't want any wiggling. I want a straight answer out of you Goolsbee. What credit card does Obama use?

AUSTAN: What card he uses... does the President get to use a credit card?

BEN: I don't know, does he have to give that up along with his Blackberry?

AUSTAN: Yeah, he might.

BEN: Well, thank you very much, Mr. Goolsbee, for speaking with us.

AUSTAN: My pleasure. Anytime.

BEN: We learned a lot about credit card reform, what's in store, what new protections are gonna be added, what we're looking for to get this credit card game and make it a little fairer for consumers. Ben Popken, Meghann Marco, Consumerist.com, thanks.

(Photo, Video: Brian Goldstein)

The Washington Post reports that SEC Chairman Mary L. Schapiro isn't too happy about this.

"It's not a discrete thing to get moved away without damaging the fabric of the entire investment protection regime that is built up over many years here," she said.

Schapiro's remarks are likely to presage an intense debate over the future of financial regulation. A major business lobby yesterday expressed skepticism about adding a layer of regulation. Meanwhile, prominent consumer groups, which have long argued that regulatory agencies have not adequately protected consumers from risky mortgages and tricky credit cards, welcomed the idea of a new commission.

"This is by far the best idea that has surfaced in the last decade on how to protect financial consumers and the economy from many of the problems we've seen," said Travis Plunkett, director of legislative and regulatory affairs for the Consumer Federation of America.

Even though Schapiro and her peeps may be feeling blue, at least there's some good news for them. If they've got Comcast digital cable, they'll start getting the NFL Network for free in August!

As U.S. Weighs New Consumer Agency, SEC Stakes Out Regulatory Turf [Washington Post]
(Photo:epicharmus)

MEG: We have a reader question about going over the limit, which is a big fee that everyone is really upset with. The reader asks, "Credit cards allow you to go over the limit and chare you fees for doing that rather than having a clerk reject your credit card for being over the limit. Isn't there a way to opt out of these services? And shouldn't there be a simple way to do so?"

AUSTUN: It's another one of these tricks is that your credit limit is $10,205. Now, you better remember how much you've spent for the whole month because when you get to that, it doesn't reject it. They just send you a fee that says, "Oh, you wen't over your limit! You didn't know, but you went over it." So the President has said, well we ought to do, for example, is have an opt-out box you can check that says "If I get to my credit limit, reject my thing when I try to buy it!" "No no no, you can't buy it, you're over your limit." This is again one of those "Is it reasonable to expect people to know exactly where they are relative to their limit? And when the limits are changing around unilaterally anyway, strikes me, again, as preying on the lack of information on the part of the customer.

BEN: A lot of our readers are interested in these mandatory binding arbitration clauses, and these class-action waivers. Is Obama concerned about that? And are we going to do anything about them? Because that's another case where we're stripping consumers of their power. Credit card companies are basically afraid to get into a real court with a consumer.

AUSTUN: The thought of thousands upon thousands of people having to go to court to sue to deal with various credit card problems, because you could see that being unappealing, you can see a role for arbitration. On the other hand, a lot of accusations that these mandatory arbitrations are with firms who are representing themselves to the credit card companies as, they are doing double-duty as debt-collection agencies, as well as mandatory arbitration... if you're a consumer going to mandatory arbitration with a firm whose job it is to collect money from consumers, to give back to banks, that strikes me as a difficult situation. It's not an obvious thing. If you ban mandatory arbitration, you will end up with thousands more lawsuits, and that's not obviously in the consumer's interest, but on the other hand I think we do gotta be mindful of some of these abuses.

BEN: Right, another one of those, what seems to be an abuse, or at least definitely a conflict of interest, I don't recall the specific study but they found that basically the arbitrators that were returning judgements in favor of the credit card companies most often got the most business. Will there be space maybe, because obviously what we have isn't working and chucking it is probably not a good idea either, could we see a mandatory arbitration reform bill down the line?

AUSTUN: That's an interesting idea, I was going to say, maybe this is due for a Consumerist expose of this stuff. I don't know which of those is true, I mean, I'm not a lawyer, we'd need to really get the credit lawyers in, to look at this, but I have seen these allegations that you're speaking of, of mandatory arbitration, of the firms selling themselves to the bank as "We never give the customer anything, hire us as your abitrator!" That seems problematic. If that's actually what's happening, it seems like something's ripe for reform.

BEN: I saved our best, our hardest, question for last. And I don't want any wiggling. I want a straight answer out of you Goolsbee. What credit card does Obama use?

AUSTUN: What card he uses... does the President get to use a credit card?

BEN: I don't know, does he have to give that up along with his Blackberry?

AUSTUN: Yeah, he might.

BEN: Well, thank you very much, Mr. Goolsbee, for speaking with us.

AUSTUN: My pleasure. Anytime.

BEN: We learned a lot about credit card reform, what's in store, what new protections are gonna be added, what we're looking for to get this credit card game and make it a little fairer for consumers. Ben Popken, Meghann Marco, Consumerist.com, thanks.

PREVIOUSLY:
Part 3
Part 2
Part 1

MEG: Ok, this is a question from reader Johnathan. He wants to know, "Why are credit card terms the only contract I can find that are subject to unilateral dictation of changes in terms?

AUSTAN: The credit card companies reserve the right to change the terms. Uh - there are other contracts that have that feature. There are certain things in credit cards which are even more questionable. Like they reserve the right to change the interest rate on loans you already took out. So when you make a purchase, you have a balance, something happens, your rate goes up, they apply it to stuff you already bought. This is a very iffy type of a contract. Similarly, the print is barely readable, the language is not in English, it's in kind of "Bank-o-nese," which you really need a law degree—you probably need more than a law degree. Most lawyers can't even read it. And it gives them the right to administer fees of their choosing, for behaviors of their choosing, and the argument that they give in response when they you get the fee and complain is, "Well if you don't like it you should have read the contract." Or, "You should go find a new credit card." Those two explanations are deeply not satisfying. That's why two central themes in the President's plan are: it's got to be in plain language, and then a second focus of the President's plan is prohibiting certain practices, which are just over the line, like, changing interest rates on balances you already incurred, and things like that.

BEN: That feature struck me in particular because when the bankers defend it they say that they're repricing risk, but as far as I understand, a risk is something that could happen in the future. But if it's already happened, then where's the risk and why are they repricing for it?

AUSTAN: You know, the thing is, getting in the insurance business of insuring things that didn't happen, is a great business. Because it just means you pay us. And that is the situation a lot of credit card companies are in. "Well, you know, we have to be compensated for the risks," but this is already debt, they already took it out! You had a deal at a certain interest rate, and they're going back and changing it. In addition, there are certain practices, that even with disclosure they're very hard to explain. And the view from the Federal Reserve, as well as Congress, as well as the President has been, we gotta address those. So, as an example, if you've got two different kinds of debt, some has a high interest rate and some has a low interest rate. The credit card companies have, and you make a payment, the credit card companies will apply your payment automatically to the low-interest rate one. Leaving you the debt of the high-interest one so they get more money off of you. You can explain, what the Federal Reserve found, is you can explain this to people, but a lot of people still don't quite get what you're saying, so it's far better, it's a far better idea to simply require them to pay down the highest [interest] one first.

BEN: All these different practices you've been describing, it sounds like we're talking about a game where it's rigged for the house from the outset, and the rules are always changing, and you can never know them, and with credit being so important for consumers, and consumer spending driving 70% of the economy, how did we let it get this bad in the first place?

AUSTAN: It's not there's something wrong with credit cards. There's a perfectly viable business that consumers can benefit from, that the banks can profit from... all the President is saying is let's be completely above-board, transparent, and honest with what we're doing, and not engage in certain kinds of practices that are really preying on the lack of knowledge and the lack of understanding on the part of the consumer. Penalty fees to discourage a certain kind of behavior, everyone understands that. Penalty fees where we design it so you can't get out of paying the penalty as a way we're going to use just to make money... now I think we've gone into a space where we don't want to be.

Next: Part 4.
Previously:
Part 2
Part 1

Keep track of the entire 4-part series as it rolls out at consumerist.com/tag/interviews/goolsbee.

• Charging interest immediately on a purchase
• Reinstating annual fees
• Further curtailing cash-back and other rewards programs, like frequent flyer miles

Credit Card Industry Aims to Profit From Sterling Payers [NYT]

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.

TRANSCRIPT:

EXTERIOR: WHITE HOUSE GATES

Ben: Hey Ben Popken here with Meghann Marco, Consumerist.com, we're here at the White House—

Meghann:—invited to the White House—

Ben:—to talk credit card reform with Austan Goolsbee, senior economic adviser to Obama. We asked for your questions about credit card reform and we brought them here, so we're gonna find out what's in store for the future of plastic in America.

INTERIOR: CONFERENCE ROOM

Meg: So, as you know, we here at Consumerist, we make our living explaining the perils of the credit card industry to consumers, so why are you guys trying to put us out of business by reforming the credit card industry?

Austan: No no no, we're trying to help you, that's exactly, we've been listening to you for this long and it's clear as the President said, there's nothing wrong with a credit card industry where people can get access to credit, and people ought to pay their bills, but what we've gotten into is this situation where you've got some players engaging in clearly deceptive practices and predatory practices where consumers don't have full information about what they're getting themselves into, and where the industry's made more than $15 billion in penalty fee income last year. So what they've done is just turned what use to be fees for penalties into really a profit center. And we've got to get away from a model like that.

Meg: So we've got a question from Consumerist reader Jason. He wants to know, why can banks be allowed to change APR on existing balances? Shouldn't the new APR only be applied to the balances and purchases moving forward from the date of the change?

Austan: Yes, Jason's totally right, that is one of the central elements in the Obama views, is that in a series of practices like changing the interest rate on money you already, loans you already took essentially, that it doesn't make any sense, that we oughta get rid of that.

Ben: Along those lines, James Robrahn asks, "How's it that the banks are getting billions in TARP funds and then they turn around and they're cutting off people's credit lines and raising interest rates in this time of crisis?" What's going to be done about that?

Austan: When you're in a crisis mode, it's clear financial institutions are pulling in credit in all sorts of forms, that's why the financial rescue was needed, it's been a big effort of the administration, trying to get the lines of credit back flowing, to consumers, through credit cards, to small business, to a whole bunch of areas.

Ben: And what are some of those steps that are going to unlock credit for consumers?

Austan: Well a lot of the steps to unlock credit are more macro in nature, as I said, it would be relatively difficult to go legislate, for the government to go figure out, here's a credit-worthy individual, you should go give them a loan, is much harder. So the things that they're doing is we've go the financial rescue in place, we've had a series of efforts where the government's trying to unlock consumer credit, student loan credit, automobile credit, small business credit, through the buying up of securitization, buying up various investments, which, they've tried to make it more appealing for people to get into that market. It has been met with some success, though we are certainly wanting to expand those markets now.

Ben: Up until now, basically, credit card companies have said, well we don't regulation, we just need more disclosure. So, this is a new change of tactics. So I'm kind of wondering, you know, why don't we take that up? why don't we go with disclosure and do it like they do in Canada and cigarettes? You buy a box of cigarettes in Canada and you have a picture of a dessicated lung on the box and it says you smoke these and you will die. So with credit cards, you put a picture of a family evicted from their foreclosed house and it can say, if you use this improperly, it will lead to your financial ruin? Why doesn't the administration push for something like that?

Austan: Meghann, is he Canadian?

Ben: Clearly. I'm Clearly Canadian.

Austan: The President totally agrees with the importance of disclosure, and disclosure and transparency. Which are related but not the same thing. I mean, I have a PhD in economics, I can't understand a lot what's in the contracts under your credit card, and my eyesight is not sufficient to even be able to read it a lot of the times. So, the President's program is based on plain language, and reasonable disclosure. So disclosure plus transparency's important... I don't think that's all the President's fully on board with that's all let's do. I think he thinks we need that, but in addition, there are certain practices, that, even with disclosure, they're relatively hard to explain, and the credit card companies have engaged in gaming the system so that they just need to be prohibited. So, setting your payment date to be on a Sunday, so that you literally can't pay on the payment date, it either has to come in early or else it's late and you get a penalty fee. Or setting the payment time to be noon, so even if it comes in but it came in in the afternoon oohp! You had a late fee, you add another 15 dollars. So there are a series of practices, be it the form of penalty fees, raising interest on loans you already took out, a variety of other things that the President thinks we need to do more than just disclosure and transparency.

Next: Part 2, Part 3, Part 4.

Keep track of the entire 4-part series as it rolls out at consumerist.com/tag/interviews/goolsbee.

(Previous version of the post with all the comments here).

TRANSCRIPT:

EXTERIOR: WHITE HOUSE GATES

Ben: Hey Ben Popken here with Meghann Marco, Consumerist.com, we're here at the White House—

Meghann:—invited to the White House—

Ben:—to talk credit card reform with Austan Goolsbee, senior economic adviser to Obama. We asked for your questions about credit card reform and we brought them here, so we're gonna find out what's in store for the future of plastic in America.

INTERIOR: CONFERENCE ROOM

Meg: So, as you know, we here at Consumerist, we make our living explaining the perils of the credit card industry to consumers, so why are you guys trying to put us out of business by reforming the credit card industry?

Austan: No no no, we're trying to help you, that's exactly, we've been listening to you for this long and it's clear as the President said, there's nothing wrong with a credit card industry where people can get access to credit, and people ought to pay their bills, but what we've gotten into is this situation where you've got some players engaging in clearly deceptive practices and predatory practices where consumers don't have full information about what they're getting themselves into, and where the industry's made more than $15 billion in penalty fee income last year. So what they've done is just turned what use to be fees for penalties into really a profit center. And we've got to get away from a model like that.

Meg: So we've got a question from Consumerist reader Jason. He wants to know, why can banks be allowed to change APR on existing balances? Shouldn't the new APR only be applied to the balances and purchases moving forward from the date of the change?

Austan: Yes, Jason's totally right, that is one of the central elements in the Obama views, is that in a series of practices like changing the interest rate on money you already, loans you already took essentially, that it doesn't make any sense, that we oughta get rid of that.

Ben: Along those lines, James Robrahn asks, "How's it that the banks are getting billions in TARP funds and then they turn around and they're cutting off people's credit lines and raising interest rates in this time of crisis?" What's going to be done about that?

Austan: When you're in a crisis mode, it's clear financial institutions are pulling in credit in all sorts of forms, that's why the financial rescue was needed, it's been a big effort of the administration, trying to get the lines of credit back flowing, to consumers, through credit cards, to small business, to a whole bunch of areas.

Ben: And what are some of those steps that are going to unlock credit for consumers?

Austan: Well a lot of the steps to unlock credit are more macro in nature, as I said, it would be relatively difficult to go legislate, for the government to go figure out, here's a credit-worthy individual, you should go give them a loan, is much harder. So the things that they're doing is we've go the financial rescue in place, we've had a series of efforts where the government's trying to unlock consumer credit, student loan credit, automobile credit, small business credit, through the buying up of securitization, buying up various investments, which, they've tried to make it more appealing for people to get into that market. It has been met with some success, though we are certainly wanting to expand those markets now.

Ben: Up until now, basically, credit card companies have said, well we don't regulation, we just need more disclosure. So, this is a new change of tactics. So I'm kind of wondering, you know, why don't we take that up? why don't we go with disclosure and do it like they do in Canada and cigarettes? You buy a box of cigarettes in Canada and you have a picture of a dessicated lung on the box and it says you smoke these and you will die. So with credit cards, you put a picture of a family evicted from their foreclosed house and it can say, if you use this improperly, it will lead to your financial ruin? Why doesn't the administration push for something like that?

Austan: Meghann, is he Canadian?

Ben: Clearly. I'm Clearly Canadian.

Austan: The President totally agrees with the importance of disclosure, and disclosure and transparency. Which are related but not the same thing. I mean, I have a PhD in economics, I can't understand a lot what's in the contracts under your credit card, and my eyesight is not sufficient to even be able to read it a lot of the times. So, the President's program is based on plain language, and reasonable disclosure. So disclosure plus transparency's important... I don't think that's all the President's fully on board with that's all let's do. I think he thinks we need that, but in addition, there are certain practices, that, even with disclosure, they're relatively hard to explain, and the credit card companies have engaged in gaming the system so that they just need to be prohibited. So, setting your payment date to be on a Sunday, so that you literally can't pay on the payment date, it either has to come in early or else it's late and you get a penalty fee. Or setting the payment time to be noon, so even if it comes in but it came in in the afternoon oohp! You had a late fee, you add another 15 dollars. So there are a series of practices, be it the form of penalty fees, raising interest on loans you already took out, a variety of other things that the President thinks we need to do more than just disclosure and transparency.

Next: Part 2.

Keep track of the entire 4-part series as it rolls out at consumerist.com/tag/interviews/goolsbee.

Linda Sherry of Consumer Action said that her group is happy with both bills being considered. She says the one in the Senate was originally stronger, but will likely be a lot weaker by the time it comes to a vote.

There is a flurry of last minute negotiations going on and a whole slew of amendments to the credit card legislation. Some are completely ridiculous and others are thoughtful new ideas. The ridiculous ones are unrelated, like Coburn's idea to stick something in there like the ability to carry guns in national parks.

One thing that failed to stick was an amendment that would have capped interest rates. The amendment, by Vermont Senator Bernie Sanders (an independent), would have capped rates at 15%. Rebecca Branch of the New Mexico Attorney General's office said, "I believe an interest rate cap failed due to the intense lobbying by the loan industry. We were told by the car title lenders that they could not survive as business unless they charged 300 percent." Sherry added that Consumer Action supports rate caps but "they are politically unpopular as they are seen as interfering with a free market economy."

She also urged everyone to contact their senators to ask them to vote for the CARD Act. Consumer Action has a form set up on their website that does most of the work for you, so that you can just add your thoughts and hit "send."

Transcript: NMI live blog from Obama's town hall on credit card reform [New Mexico Independent]

(Photo: numberstumper)

We've been writing about this a fair amount in the last few months, and a recent post summarizes some of the points of contention between the House and Senate, Democrats and Republicans, and consumers and credit card companies. We've also been defining some of the phrases that are being thrown around, like double-cycle billing and universal default.

With the increase in activity in the Senate comes fact sheets and talking points from congressional and committee offices. Here is a summary (PDF) of the Senate bill. We also have some comparison charts and other fact sheets were working on that we'll get up soon.

There's also the Consumers Union site Defend Your Dollars, which is writing about the reform process.

We'll be posting more throughout the week; in the meantime, send us your questions!
(Photo: waynegunn)

(Photo: afagen)

UPDATE: We'll be talking to Austan Goolsbee, senior economic adviser to Obama.

Last time we checked in, the Fed had passed some good regulations that stopped some of the worst abuses by credit card companies. Unfortunately, those regulations won't go into effect until July 2010 and they don't go as far as what Congress and the President want. The Credit Cardholders' Bill of Rights, sponsored by Representative Carolyn Maloney (D-NY) cleared the House by a wide, bipartisan margin, but didn't get out of the Senate before it adjourned. On the other side, Senator Chris Dodd's (D-Conn.) Credit CARD Act contains much of the same language as the House bill but also adds important protections for consumers under 21, who are often targeted by credit card companies marketing on campuses.

With the renewed vigor of a new Congress and administration, both houses of Congress are working on getting legislation passed and sent to President Obama. Here's what the legislation will do:

• Banks can only increase a credit card's APR if the rate is a promo rate that expired, if the rate is based on an index (for instance, prime plus 3%) and the index increases, or if the customer is late or doesn't make a payment on that account. This effectively bans universal default, where a bank will increase a card's APR because you were late on paying a different card.
• Bans double cycle billing
• Banks can't charge fees or consider you in default if your entire balance consists solely of interest that accumulated on the charges.
• Banks cannot notify credit agencies that you have a new credit account until you use or activate that account
• Banks cannot charge fees for paying by phone or online.

The House bill will take effect one year after the bill becomes law, or no later than July 2010, when the Fed regulations take effect. One exception to this is an amendment that was added will require banks to notify customers 45 days before raising their interest rates; this measure will take effect 90 days after the bill is signed.

President Obama has indicated that he'd like to include more protections, such as requiring banks to apply credit card payments to balances with the highest APR, rather than split proportionally. Obama is also proposing requiring companies to get consumers' permission before adding overdraft protection, rather than just giving consumers the chance to opt out, like under the House bill. Additional protections include requiring that payments be due at the same time every month, and that billing statements disclose how long it will take to pay off the balance when making only the minimum payment.

Lots of good stuff out there. Politically tricky as it may be, we'd love to see merchant agreement violations like minimum purchase and and fees for using credit cards addressed somehow, but that will have to wait till another day.

(Photo: jakesdad)

'Chia Obama' booted from local stores [FOX 13] (Thanks to Chester!)

American Express has given her an "interim" refund in full, pending a review that will involve the credit card company presenting to PIC officials all of Blessman's documentation on the services she feels she was denied.

"One Spurned Purple Ticket Holder Claims Victory" [Washington Post] (Thanks to Megan!) (Photo: Patricia Jones Blessman)

CoarseLive writes:

Last week after learning about President Obama's mortgage assistance programs, the news said to go to mortgage company websites to learn more about how each company was handling these proposals. Last week, I visited CitiMortgage.com. Attached is a picture of their website prompting the visitor to learn about the new programs they have available for homeowners. I followed the links, and inserted my information. After that was completed, their service prompted me to schedule an appointment with a representative. The screen capture of that prompt is also attached. I schedule an appointment for today for between 9:30 and 10:00. I took off work to wait for the call, that way I would be here with all of my information and papers.

After I received no call, I began calling Citi. I was transferred to 4 agents, all of whom had no idea what I was talking about and told me, unequivocally, that Citi doesn't schedule calls with customers online. I walked the final agent in the Loss Mitigation center through their website, and the agent Jeremy Mirchal in the Missouri office told me that the option doesn't exist. That "I'm being told that no one here is aware of that, and that it doesn't exist." He repeated that "we don't call customers."

I asked Jeremy to transfer me to his supervisor. He said he would. Then he transferred me back to India, and I was promptly disconnected.

After being hung up on, I called back and found my way back to CitiMortgage's Loss Mitigation office. I spoke with another person named "Jeremy." I explained my situation, and he put me on hold. He told me I had to talk with customer service. I told him that all of my calls began with Customer Service, and that I would like to speak with a supervisor. He said yes, and then transferred me to Customer Service.

Once Customer Service was on the line, I explained that I was "accidentally" transferred from Loss Mitigation. They then hung up on me.

(Photo: Panorama of the City of New York)

The Corporate Average Fuel Economy (CAFE) standard for passenger cars has been 27.5 miles per gallon since 1990. Mark went through the list of cars, checked their miles per gallon, and found that the average fuel economy was 23.4 mpg.

The best fuel economy goes to EPA Administrator Lisa Jackson, whose 2008 Toyota Prius and Honda Odyssey minivan average 33 mpg. At 20 mpg, Vice President Biden's chief economist Jared Bernstein's 2005 Honda Odyssey is the worst. For more analysis, check out the original post.

CAFE Standards: Fed Task Force FAIL [William & Mary American Constitution Society]
(Photo: fallenposters

"While our economy may be weakened and our confidence shaken; though we are living through difficult and uncertain times, tonight I want every American to know this: We will rebuild, we will recover, and the United States of America will emerge stronger than before..."

"The weight of this crisis will not determine the destiny of this nation..."

"The answers to our problems don't lie beyond our reach. They exist in our laboratories and universities; in our fields and our factories; in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth."

"Those qualities that have made America the greatest force of progress and prosperity in human history we still possess in ample measure. What is required now is for this country to pull together, confront boldly the challenges we face, and take responsibility for our future once more."

"We have lived through an era where too often, short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election..."

"A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn't afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day."

"Well, that day of reckoning has arrived, and the time to take charge of our future is here."

"Now is the time to act boldly and wisely, to not only revive this economy, but to build a new foundation for lasting prosperity..."

"Now is the time to jump-start job creation, re-start lending, and invest in areas like energy, health care, and education that will grow our economy, even as we make hard choices to bring our deficit down."

The times demand sacrifices on "some worthy priorities" by Republicans and Democrats alike, Mr. Obama said. "But that does not mean we can afford to ignore our long-term challenges. I reject the view that says our problems will simply take care of themselves, that says government has no role in laying the foundation for our common prosperity."

The company that's scamming them, U.S. Coin Network (uscoinnetwork.com and obamacoincollection.com), won't let them cancel the remaining orders they placed that haven't shipped yet, either.

We think this looks like the sort of thing the feds may want to get involved in. And if they don't do anything about it, we're going to go buy some new ink for the old color printer and start selling collectible Obama Pennies online.

 
* And also hit yourself in the head with a mallet, kthx. Return to post.

[KATU 2] (Thanks to Joe!)

• With the private sector in shambles, the Federal government is the only one with enough juice left to fix anything.
• We need to create more jobs.
• Need to get banks to start making loans again.
• TARP failed due to lack of oversight.
• Consumer overspending didn't get us into this mess, banks betting thirty dollars with one dollar did.
• Phrase of the night: "Ginned up." "this notion that somehow I came in here just ginned up to spend $800 billion...that wasn't how I envisioned my presidency beginning."

Here's the full transcript.

In his remarks, President Obama attacked "executives being rewarded by failure," and argued excessive severance packages and bonuses for companies receiving federal money were in "bad taste." Bailed out companies will be required to disclose and justify perks and bonuses to taxpayers.

Responding to Obama's plan to "take the air out of their golden parachutes," a business consultant said:

"That is pretty draconian — $500,000 is not a lot of money, particularly if there is no bonus. And you know these companies that are in trouble are not going to pay much of an annual dividend.”

That's rough.

U.S. Plans $500,000 Cap on Executive Pay in Bailouts [NYT]
(Photo: Public Citizen)

Obama said Americans should be able to count on the government to keep children safe when they eat peanut butter, and that includes his 7-year-old daughter, Sasha, the AP reported.

"That's what Sasha eats for lunch probably three times a week," Obama said. "And you know, I don't wanna have to worry about whether she's gonna get sick as a consequence to having her lunch."

"Obama Orders Review of FDA in Salmonella Outbreak" [U.S. News & World Report]
(Photo: lucianvenutian)

According to CNN, a Treasury department official informed Citigroup that such a purchase was "unacceptable." According to White House Press Secretary Robert Gibbs, President Obama told Citigroup executives to "fix it," noting that buying a new jet was probably not "the best use of money at this point."

After refusing to respond to requests for comment yesterday, Citigroup released a statement saying they have "no intent to take delivery of any new aircraft."

White House Presses Citigroup to Give Up Jet [CNN]
(Photo: voteprime)

A shocked customer tells My Fox NY that Ted Kefalinos, proprietor of Lafayette French Pastry, asked her, "Would you like some drunken negro heads to go with your coffee? They're in honor of our new president. He's following in the same path of Abraham Lincoln; he will get his."

The local community board is now calling for a boycott, and Kefalinos seems both confused and contrite:

"I'm sorry they feel that way because I was trying to do a nice thing." Not seeming to grasp in any way the degree of outrage he's sparked, he added, "I did it and that's the end of it and it's over."

Well, they do look kind of tasty, but I don't want to eat a Drunken Any-ethnicity Head no matter how much chocolate is on it.

"'Dunken Negro Face' Cookies On Sale at Greenwich Village Bakery" [Gothamist] (Thanks to Grace!)
(Photo: Gothamist)