Reform in the Credit Card Industry

This story had me moving in one direction when I first read it and in another when I was finished. See if you feel the same.

Any time I see "regulation" billed as "reform", my libertarian alarms go off. What is our government meddling in now, I ask myself? Additionally, any time I see legislation associated with Rep. Carolyn Maloney (D-NY), I run for the hills, as I have very little time for this over-the-top-with-emotion Yenta whose claim to fame is to have had a husband tragically killed by that wingnut on the Long Island railroad a few years ago.

That said, two things about the credit card industry REALLY bother me, and Congressional action to regulate them seems appropriate. The first is raising interest rates on EXISTING balances. Of all the BS things these guys do, this takes the cake. How would all of you homeowners (the most privileged class of investors in this country) like it if your mortgage rate went up? Yes, yes, I know there are variable rate mortgages, but I'm talking about fixed rate.

The second things that gets me is raising interest rates because of other debts one may have (irrespective of one's payment profile to the credit card company).

I realize that both of these practices by the credit card companies are ways to mitigate financial risk, and I realize that it would be better if market forces prevailed and consumers simply walked away from cards that committed these pernicious practices. Maybe a little pressure from Uncle Sam could help these market forces gather.