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Credit card reform legislators bite the hands that feed them

Tyler Metzger

Reports of the new rules governing credit card companies has come and gone. The legislation sailed through the Senate Tuesday, and the House passed it yesterday. The only remaining hurdle now is President Barack Obama, who might sign it into law before the week is over.

The regulations didn’t just appear out of the blue, however. Credit card users didn’t just look into the sky and pray, only to see a bill falling out of the heavens where it landed nicely on Obama’s desk. Oh, no. People were involved in getting this passed. And what motivates people like nothing else? Money.

You know the game. It’s POL 101. There are special interest groups, lobbyists, political interest groups. Those players give money or promise favors to the politicians that can generate regulations that help the money-givers. But is that always the case? Do interest groups and the like give money to politicians who work against them?

After doing some research at the Center for Responsive Politics’ Web site, which tracks campaign contributions, I can definitely say yes. I used their database to track how much money the major politicians involved in the new credit card legislation received from the top credit card issuers’ political action committees (PACs), in 2008. PACs are organized by companies to raise and spend money to elect and defeat certain candidates.

Here are a few interesting comparisons:

  • “To card companies who have fought this bill every step of the way: It is now time for you to clean up your act,” said Rep. Carolyn Maloney, the New York Democrat who sponsored the House credit card bill.
    Money received from American Express PAC in 2008: $7,000
  • “This cements a victory for every American consumer who has ever suffered at the hands of the credit card industry,” said Sen. Christopher Dodd, the Connecticut Democrat who co-sponsored the Senate bill.
    Money received from MasterCard PAC in 2008: $10,000
  • “Credit card contracts are unclear at best and thoroughly confusing at worst,” said Sen. Richard Shelby, who co-sponsored the Senate bill with Dodd and is the ranking Republican on the Senate Banking Committee.
    Money received from JPMorgan Chase PAC in 2008: $5,000
  • And of course, opponents of the bill received donations, too:
    • “This bill will take us back to a previous era — a bygone era where everybody paid higher interest rates, where a third fewer people had access to credit, and we had all of these dreaded annual card fees,” said Rep. Jeb Hensarling, a Texas Republican.
      Money received from Visa PAC in 2008: $10,000

    Use the graphic below to view how much money proponents of the new credit card bill received from issuers and payment networks’ political committees. Remember: The organizations themselves did not contribute this money; the money was raised and donated by the organization’s political interest committee.

    See related: House easily passes credit card reform bill, Senate passes tough new credit card reform bill, What the new credit card law means for you, How to cope until new credit card law takes effect

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  • Becky

    “What’s in your Garbage?” Capital One

  • RLH

    You have it wrong the reason these candidates backed the legistlation was because the credit card companies disappointed them with not contributing enough to their campaign.