Most Americans have an active stake in one issue that might be easy to overlook in the midst of the 2012 Presidential campaign: policies affecting our day-to-day use of credit cards.
Between the incumbent President, several contenders for the Republican nomination, and a Libertarian candidate, it can be tough to keep track of the various positions on any issue. To help make sense of their potential impact on credit card rates and availability, CardRatings.com has grouped the candidates into four categories, listed alphabetically by last name within category.
The business perspective
Both of the following Republican candidates have past ties to the business community - ties which are proving to be as much of a liability as a benefit during the campaign:
Former House Speaker Gingrich espouses the pro-business doctrine that most regulation is unnecessarily burdensome. He would repeal the Dodd-Frank financial reform legislation, and also repeal Sarbanes-Oxley, a corporate accountability measure that was put in place in the aftermath of the Enron scandal.
Former Massachusetts governor Romney calls regulation a barrier to job creation. Taking a more moderate view than Gingrich, he would repeal Dodd-Frank and amend (not repeal) Sarbanes-Oxley.
Government regulation does add to the cost of doing business, and for credit card customers, this cost can show up in the form of higher credit card rates and fees. On the other hand, some of the regulations Romney and Gingrich rail against were put in place to protect consumers. With less regulation, the trade-off for lower costs might be a more buyer-beware environment for credit card users.
The libertarian perspective
Though only one is running for the Libertarian Party, both of the following candidates represent the libertarian perspective that when it comes to government, less is more:
Former New Mexico governor Johnson's positions include being fiscally conservative and generally keeping a tight check on the role of the federal government. Among his priorities, Johnson wants to audit and reform the Federal Reserve.
Though running as a Republican, Texas Congressman Paul seems to take the Libertarian viewpoint further than Johnson, seeking to abolish, rather than just reform, the Fed. As a member of Congress, Paul has consistently voted against stimulus spending, financial reform and credit card reform.
The libertarian candidates share the pro-business loathing of regulation, but they differ in the way they oppose the Federal government actively supporting business, such as with fiscal stimulus and through actions of the Federal Reserve. Ideally, their views would make the the credit card industry more competitive, but at the extremes those views could also make it less stable.
For better or worse, these candidates seem willing to take positions directly contrary to those of large financial companies:
Ambassador and former Utah governor Huntsman dropped out of the GOP race on Jan. 16. He opposes Dodd-Frank on the objection that it creates a safety net for big banks. Instead, Huntsman wants to break up big banks, and put in measures that would limit the size of banks and discourage risk-taking.
The Democratic Party incumbent has presided over major financial reforms such as the Credit CARD Act of 2009 and the Dodd-Frank Act of 2010, and recently took the bold move of making a recess appointment of Richard Cordray as head of the Consumer Financial Protection Bureau.
Supporting financial reforms would seem to put these candidates squarely in the corner of credit card customers, right? Not necessarily. Some would argue that an excess of regulation forces credit card rates higher, and/or limits the availability of credit cards.
For example, if you have good credit and pay your bills on time, you may end up paying for measures designed to protect people whose bad credit and payment habits have exposed them to high credit card fees and interest rates. So, whether or not restrictions on credit card companies are good for you depends on what type of customer you are.
Candidates with other priorities
While generally adhering to pro-business, anti-spending positions, these two Republicans seem to place a higher priority on issues not directly related to finance:
Texas governor Perry announced today he would drop out of the GOP race. While he takes a pro-business stance, his priorities touch less on finance and more on repealing healthcare reform and loosening up regulations for oil companies.
Former senator Santorum has clearly staked out a position as the most avid social conservative remaining in the race. He has spoken out against Romney's and Obama's healthcare reform plans, observing in the National Review that such laws "increase the role of government in the healthcare industry by piling on new regulations."
You can figure on these two candidates falling more or less in the pro-business camp, but if their administrations were to pursue other legislative priorities, the impact of their policies on credit cards would be difficult to assess.
CardRatings.com does not endorse any candidate mentioned in this article. The positions represented in this story were based on the candidates' websites as of Jan. 13, as well as their past legislative records. Policies affecting credit cards may not be as controversial or emotional as some other election year issues, but in terms of the day-to-day reality that can affect the Visa or MasterCard in your wallet, these policies are worth considering when you make your decision in November 2012.
The original article can be found at CardRatings.com:
How Decision 2012 could change your credit cards