I fail to see, from the posted argument, how this screws the consumer.

The argument posted supports the proposition that financial reform will result in more transparency, less marketing, less hidden fees, and will not save the consumer anything since the existing costs will be shifted.

But it does not back the proposition that financial reform will cost the consumer more.

While I'm no fan of government over-regulation, there are so many fallacies in this article that one hardly knows where to begin. Here are two:

"Responsible consumer spending" does not belong in the same room with a discussion of credit card interest rates. Anyone who carries a balance on a credit card is not spending responsibly.

Financing a business using a credit card? He's simply nuts!

Credit card companies are rapacious. They are not your friends, and they are not trying to help you. This guy seems to think they are.

Bottom line here in my eyes:

While a certain level of consumer protection is necessary to prevent fraud at the expense of consumers, or physical harm to the same, the dictating of when and how much a bank, or any business, can charge for its services is a violation of the basic rules of a free market system.

Consumers, you are NOT entitled to free checking. You are NOT entitled to free ATMs everywhere you go.
You are absolutely NOT entitled to interest rates that reflect better habits than you have.

Credit agencies are certainly not our "friends", but no business is. What they happen to be are profit motivated entities that offer convenient services in exchange for profit, none of those services are free, even if the consumer does not pay directly.

I don't mind some consumer protection within limits of physical harm or fraud, but I'll be damned if I need a f'cking nanny.

I have no skin in this game, since I use my credit card in lieu of checks. I pay the balance, in full, every month. The credit card companies ought to hate me, but they give me free cards, and pay me reward money besides. I have no complaints, but somebody is paying for this and it isn't me.

I work with people who are not as disciplined or fortunate. The credit card companies should not be able to raise rates and payments on people, based on some of the ridiculous excuses they have used. Deals should be made in good faith, and kept. If you borrow at X% and the payment is $Y, that should be the bargain, kept by both parties.

The abusive behavior invited the government to interfere in their business, and interfere it has.

Yes, they'll make it up somewhere. Unlike the government, the banks can't print more money. No profit means no bank and no jobs.

"Financing a business using a credit card? He's simply nuts!"

This is done all the time. In my business, for instance, which is tourism, things are seasonal. Yet, during down times, we still must keep going - pay our employees and buy stuff, often emergency purchases. Many businesses live on credit during these months, then pay it back when things are busier. Most small businesses do not maintain high enough profit margins to cover the slower times without relying on credit.

Add to this that banks are not lending, as they were in the past, so traditional business loans aren't available, and therefore credit cards are essential. They also offer points and miles, which helps many businesses.

"I fail to see, from the posted argument, how this screws the consumer."

Really? I fail to see how higher interest rates for all and frequent credit refusal is good for the consumer.

"But it does not back the proposition that financial reform will cost the consumer more."

Not only does reform (i.e. regulation) interfere with the normal competitive free market (which is what keeps costs reasonable to begin with) but it comes with a ton of paperwork and bureaucracy which results in real additional cost to the business. This is passed to the consumer. Think of the 1099 provision of the Obama health reform bill. ALL businesses must now report any expense over $600 on a 1099 form. This is hundreds or thousands of 1099 forms that must now be filled out at real cost to the business. It will surely drive many small companies out of business, further limiting competition.

About the 1099 thing, Gregg travels a lot for business, and couldn't believe it when I told him he'd have to 1099 Hertz and Delta -- just for starters. Where do you even send the 1099s? To whom?

Thanks Dodd and Frank! Two of the biggest dick suckers out there.

I can sympathize with the rational behind consumer financial reform as I'm really not that far from the paycheck to paycheck-which bills do I not pay this month-phase of life. But many of the pitfalls that plague those folks are already being solved through the voluntary adoption of new technologies. All regulation has 'unforseen' consequences so why regulate if it's not needed?

I used to get really pissed when I would run out of money and then go make a couple of non-necessary ATM card purchases without knowing I was out of money. $70 in fees to buy some gum and some beer, lame. But now we have banking on our phones (poor people have better phones than you so don't pretend they can't run these apps). We have email alerts when the balance gets low, or the due date is approaching. It's getting easier and easier to stay on top of your shit.

I learned the lesson of the no payments and no interest for a year deal by buying a $200 table saw at the Home Depot. didn't pay it off soon enough and got socked with 20% interest. Thank god it was $200 instead of 5k in furniture. If we remove too many of the little pitfalls of banking then we also remove learning opportunities and set people up for a big walloping at some point.

I'd really rather see the government use policy to help teach people to save and manage their money, like my dependent care account or HSA'a. Businesses use cost centers or buckets or what have you to account for various portions of their budget. Why not encourage consumers to do the same? If you had been auto-saving in an hsa, that doctor bill wouldn't have to come at the expense of paying on your credit card this month.

Also, is the government in any sort of position whatsoever to teach people about responsible use of credit?

Starting about 1975, interest rates were rising due to high inflation, and banks started to run up against usury laws that had been passed in an earlier era. The result was that credit really tightened up. When I was a college student, it was unheard of for a student to have a credit card. When I graduated, I was finally able to get one through family connections -- with a $75 per year fee, and a whopping $500 credit limit. It wasn't until about 1985 that most of those laws got modified or repealed, and banks really started pouring out the credit cards. Some of them carried a 22% rate, but for times when you really need a credit card, it's still better than not having one. And those rates came down dramatically when interest rates started to ease in the late '80s.

I might be wrong, but my understanding of the 1099 provision is even worse then mentioned. It's not $600 per expense, but $600 per individual/company per year (just as things are $600 per year for some specific payments now). This means that you also have to track smaller payments over the year in case they add up to $600 and kick in the 1099. That's a LOT more paper work then just $600 at a time.

With the rental car example.. do a few couple $ trips.. trigger it.

"I'd really rather see the government use policy to help teach people to save and manage their money, like my dependent care account or HSA'a. "

Unfortunately that likely just means things like those lame "feed the pig" PSAs.

I have not looked at the details of these reforms and they sound like they do more than they should.

However, some reforms were really needed. Things like re-ordering transactions to get the most penalty fees should be dis-allowed. I can see ordering as they come in to the bank (which may be different then when they were actually charged).

A friend experienced ...well, it was alleged in a class action lawsuit... that the bank was waiting a couple of days to process mail to their payment center thus making a lot more payments late. Apparently this was not illegal because they were not discriminatory in the delay, in effect it was legally no different then if they just got backed up and the contract said when the payment was processed. My friend noted that he mailed a payment on a Monday for due date the next Monday and it was late. I should ask him what ever became of the suit.

On 1099, my understanding is that it is $600 of business within a year...so 600 $1 transactions would trigger the need to send one.

The IRS has said it will be issuing regulations that exclude most card-type payments from this rule, since the payment networks will be responsible under a different law. (There's still time--this doesn't go into force until 2012.) As hard as it is to believe, the IRS doesn't like useless paperwork much more than we do.

The IRS also disclaims all responibility should YOU accidentally break a law while following THEIR advice

You really want to go with 'the IRS will save us from government buracracy'?