Does Credit Card Regulation Increase the Availability of Credit Cards, Despite Industry Claims?

by Jeff Sovern

The banking industry opposed the Credit Card Act of 2009  on the ground that it would reduce the availability of credit. We heard the same objection to 2010's Dodd-Frank Act.  So you might think that it would be hard to get a credit card or to use one to borrow these days.  Well, no. Here is an excerpt from a NY Times piece:

Outstanding credit card debt — the total balances that customers roll from month to month — hit a record $1 trillion this year, according to the Federal Reserve. The number of Americans with at least one credit card has reached 171 million, the highest level in more than a decade, according to TransUnion, a credit-reporting company.

It's impossible to know what credit card lending would be in the absence of the two statutes.  But we can certainly say on the basis of this report that the statutes did not keep more consumers from having credit cards than ever before, or credit card debt from being higher than ever. Does that sound like credit cards are unavailable? Wouldn't it be nice if the industry, which calls for accountability for the CFPB, was held accountable for its own erroneous predictions (though unfortunately, by rescinding the CFPB's arbitration rule, our lawmakers seem more interested in insulating the industry from accountability)? Not that greater availability is necessarily a good thing for all consumers. The Times story, by Jessica Silver-Greenberg and Stacy Cowley,is headlined A Boom in Credit Cards: Great News for Banks, Less So Consumers

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