Trump Presidency Could Have Drastic Impact on Credit Card Regulation

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CreditCardForum industry expert weighs in on the possible effects the Trump administration would bring to the credit card industry.

A Donald Trump presidency could drastically impact credit card regulation over the next four years, suggests Ben Woolsey, a leading expert on the credit card industry. Woolsey is the president and general manager of CreditCardForum, the premier one-stop resource for and by consumers seeking in-depth information, opinions and advice on credit cards. He has spent months studying the possible effects of Trump’s policies on consumers, which could include a sharp rise in APRs and penalty fees.

Republican presidential candidate Donald Trump has stated his plans to dismantle the 2010 Dodd-Frank financial regulatory law along with nearly all financial reforms put in place by the current administration.

“By his own admission, Trump wants to erase the Obama presidency to the greatest extent possible by immediately reversing any and all executive orders made in the past eight years along with most legislation he has signed into law,” said Woolsey. “Elimination of financial regulations put in place in the aftermath of the 2007-2009 financial crisis is likely to cause average APRs and penalty fees to rise, unrelated to any future rate increases by the Fed, with the return of the ability of banks to increase rates at any time for any reason without the 45 day opt-out period currently given to consumers.”

From President Obama’s Wall Street reform law, the Consumer Financial Protection Bureau (CFPB) was created to supervise financial institutions and enforce consumer financial laws. One particular law that is enforced by the CFPB is the Credit CARD Act, often referred to as the Credit Cardholders Bill of Rights. The law has two main purposes, which are to limit issuers’ ability to raise interest rates without notice and impose certain fees (like for late payments or being over the credit limit) and to make rates and fees on credit cards more transparent for consumers.

While Hillary Clinton would likely double down on financial regulation to appease the left wing of her party, recent emails and excerpts from a Goldman Sachs speech unearthed by Wikileaks reveal her relationship with Wall Street is far cozier than her public policy positions would suggest. Regardless of any differences in her public and private positions on Wall Street reform, Clinton would be unlikely to dismantle any of the current regulatory apparatus put in place to protect consumers during the Obama administration.

“The unfettered capitalism overhaul Trump would usher would represent a decisive swing of the pendulum favoring business interests and away from the consumer protection, but ironically, could have at least one unintended effect,” Woolsey said. “Lack of regulation for prepaid debit cards in particular could actually increase cashless payment options for both legal and illegal immigrants by making the products more profitable for the issuers, further facilitating cross-border remittances among the unbanked immigrant population. This could potentially encourage further immigration and end assisting a group that Trump has based his campaign on opposing.”

Trump has also made promises to decrease the corporate tax rate, which currently stands at 35 percent, down to 15 percent. This drop for both large and small businesses is a way to keep companies from moving overseas and provide incentives for hiring and investments. Though it’s still unclear if his plan would apply a flat 15 percent rate just to corporate income or to all business income, as Trump has previously suggested.

“Under his presidency, all companies would potentially benefit from this kind of windfall, but in terms of the financial services sector in particular, the large banks would significantly increase their profit margins as a result,” said Woolsey. “Theoretically they could then afford to cut interest rates on credit cards and other types of loans, though a more likely scenario is incremental profits would simply pass through to stock holders and senior executives, rather than to consumers.”

About CreditCardForum
CreditCardForum is the premier one-stop resource for and by consumers seeking in-depth information, opinions and advice on credit cards that also allows for immediate comparison and application to preferred cards.

Since 2008, the site has been the leading online community dedicated to consumer-driven education on the credit card industry. The user-contributed forum is enhanced by a hosted blog that covers latest industry developments that help consumers make more informed decisions regarding their credit cards. It also serves as a repository for key market data from multiple sources that provides a snapshot of the industry, backed by experts in the financial services and banking arena.

CreditCardForum is the go-to site for thousands of credit-card users each week seeking information and constructive peer-to-peer engagement with the aim of strengthening their financial bottom line.


Media Notes: To schedule an interview with president Ben Wooley, please contact Leverage PR Account Executive Amy Palmer at amy(at)leverage-pr(dot)com or (512) 502-5833.

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Amy Palmer
Leverage PR
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