THIS is what Sen. MBNA supported in 2005

MBNA itself pushing people toward bankruptcy. Former MBNA account managers spill the beans on their company’s shady policies and practices.

There’s now talk about putting credit card reform in the bailout bill. Well, you know that’s got a snowball’s chance.

Is it any wonder that Obama himself, and other Democrats, want to kick the can of regulatory reform down the road past the election?

The big business of reselling securitized credit card debt

Why have credit card interest rates stayed so high over the last year or two even as the Fed cut interest rates? Why have credit card companies increased penalties for late payments, changed billing cycles to try to increase the number of late payments and more?

To generate more debt that can be securitized.

Now, because so much consumer debt is packaged into securities and sold to investors, repayment of the loans takes on less importance to those lenders than the fees and charges generated when loans are made.

Yep, MBNA, Capital One, et al, have been looking for their seats on the CDO gravy train.

And, loyal Democrats, don’t forget to thank Sen. MBNA, Joe Biden, for his part in this:

Not surprisingly, such practices generated dazzling profits for the nation’s financial companies. And since 2005, when the bankruptcy law was changed, the credit card industry has increased its earnings 25 percent, according to a new study by Michael Simkovic, a former James M. Olin fellow in Law and Economics at Harvard Law School.

The “2005 bankruptcy reform benefited credit card companies and hurt their customers,” Mr. Simkovic concluded in his study. He said that even though sponsors of the bankruptcy bill promised that consumers would benefit from lower borrowing costs as delinquent borrowers were held more accountable, the cost of borrowing from credit card companies has actually increased anywhere from 5 percent to 17 percent.

The complete story is eye-opening as well as scary. And, loyal Dems, folks like Chuck Schumer will join folks like Joe Biden in protecting the financiers of our country.

House Dem whore out to credit card companies

Thursday, the House Financial Services Subcommittee on Financial Institutions of the House Committee on Financial Services was holding hearings on credit card debt, related to a bill sponsored by Rep. Carolyn Maloney that would outlaw some of the worst credit card tricks and traps. People with debt problems had been invited to speak, until they got this switcheroo:

The people who had been invited to testify had flown in from around the country with their credit card bills in hand, only to learn that they couldn't talk unless they would sign a waiver that would permit the credit card companies to make public anything they wanted to tell about their financial records, their credit histories, their purchases, and so on. The Republicans and Democrats had worked out a deal "to be fair to the credit card lenders." These people couldn't say anything unless they were willing to let the credit card companies strip them naked in public.

Look at Maloney put her tail between her legs:

“In order to have a discussion that focused entirely on the substance and not on process, we are doing everything we can to accommodate any concerns that have been raised.”

Credit card company reps had already gotten to speak in a previous session, without any requirement that they sign waivers about what all they had done with financial data, how good or poor their privacy protections were, etc. etc.

Good thing this wasn’t the Senate, where Joe Biden, Sen. MBNA, probably wouldn’t have let the people show up in the first place.