Elizabeth Warren, described in this morning's Politico Morning Money as the Consumer Financial Protection Bureau czar (she can't be called its director because she hasn't been nominated), will be giving a speech later today with this included in her remarks:
“[T]he data we have assembled indicate that much of the industry has gone further than the law requires in curbing re-pricing and overlimit fees. … Of course, not everyone has embraced this approach. As soon as the CARD Act became law, it seems that some industry lawyers were asked to find slightly different ways to accomplish that which the legislation was intended to outlaw. …
“To its credit, the Federal Reserve Board responded with a rulemaking proceeding designed to close the loopholes. While I doubt that anyone thinks this is the last time such a rulemaking proceeding will be required, we can probably agree that this approach – write a rule, avoid a rule, write another rule – is costly for consumers and for the industry.”
It boggles the mind that the person so concerned with credit card companies finding loopholes is herself in charge of the CFPB because of a loophole, but let's leave that aside for a moment. Warren is having her first brush with regulatory reality: For every rule you create, a dozen loopholes will appear, and unintended consequences abound at the whim of shortsighted bureaucrats.
In fact, at the time the legislation was enacted, CNN reported that credit became less available to consumers, as credit card companies started to more strictly scrutinize their employees. Companies also restricted their awards programs, while annual rates were hiked. In other words, whatever benefits Warren is touting from legislation, she's not accounting for the costs.