"in my mail came a letter from a credit card company -- actually, a large British bank -- informing me that the new penalty annual percentage rate on my card will be "the Prime Rate plus a margin of up to 26.99%" Said the letter, "Based on the Prime Rate as of August 1, 2009 the current Penalty APR would be up to 30.24% corresponding to a Daily Periodic Rate ("DPR") of .0828%" That's a pretty hefty rate at a time when inflation is minimal. ...it is interesting that at a moment when the administration, the Federal Reserve, and Congressional committees that oversee banks have a stated policy of trying to protect consumers and loosen up the flow of credit in the economy, banks are jacking up rates. Maybe they are trying to make all the money they possibly can now before Congress and the administration create a new regulatory agency to protect consumers?" -- FutureOfCapitalism.com, Credit Crunch, September 8, 2009.
"Congress blundered badly when it gave the credit card industry as long as 15 months to phase out the deceptive and predatory practices that were outlawed in a new law enacted in May. Instead of backing away from exploitation, credit card companies have intensified it. For starters, they have driven up already outrageous interest rates by an industrywide average of about 20 percent, according to a report scheduled to be released next week from the Pew Charitable Trusts' Safe Credit Cards Project." -- New York Times editorial, Credit Card Chicanery, October 23, 2009.
Imagine what the health insurance companies are going to do to their premiums in the four years or more before a "public option" kicks in. Left-wingers such as those at the Times editorial page see this as an argument for swifter, more aggressive regulation. But there's a case, too, that the whole episode is an argument for less regulation, because businesses will find a way to make a profit one way or another, and by imposing regulations that artificially limit profits in one period, the government actions in essence force the businesses to try to make it up all at once before the tougher rules kick in.