DENVER, Aug 29 (Reuters) - Credit card industry analysts are wary of the sector’s regulatory outlook if Barack Obama, a harsh critic of their business, becomes U.S. president with their longtime ally Joe Biden as vice president.
Sen. Biden represents Delaware, where many credit card companies are based because of the state’s liberal interest laws and low taxes. Democrats formally nominated Obama and Biden in Denver this week.
After the Nov. 4 elections, some Senate Democrats are expected to resume a push to limit credit card fees, and possibly to reform consumer bankruptcy law.
In June, Obama said at a roundtable discussion on credit cards: “For too long, credit card companies have been using unfair and deceptive practices to trick Americans into signing agreements they can’t afford.”
Jaret Seiberg, a financial services policy analyst at the investment firm Stanford Group Co., said: “Credit card issuers were going to face an uphill battle if Obama won regardless of the vice presidential choice.”
“Our point is that Biden is unlikely to moderate Obama’s approach to credit card legislation as vice president, whereas he could have been a moderating influence on credit card legislation if he had remained in the Senate,” Seiberg said.
“To us, that means this selection is a negative for the credit card issuers.”
David Robertson, publisher of the Nilson Report, a credit card market publication, took a different view.
But Robertson said he will be surprised if the industry gets through the next few years with no regulatory changes
He said he expected the Senate Banking Committee to take up credit card legislation early in 2009. He doubted consumer bankruptcy reform would come up in the next year or two.
Biden has raised $27.4 million in campaign donations since the 1990 election cycle, according to the Center for Responsive Politics, a campaign finance watchdog.
The center said Biden's largest campaign contributor over time has been credit card giant MBNA Corp, which was acquired in 2006 by Bank of America BAC.N,
Congress’s last bankruptcy law reform in 2005 made it more difficult for consumers to erase their debts. Biden voted for that legislation, while Obama voted against it.
Massachusetts Democratic Rep. Barney Frank, chairman of the House of Representatives Financial Services Committee which handles credit card matters, said he considered the differing bankruptcy reform votes by Biden and Obama unimportant.
“Joe Biden represents the state of Delaware where the credit card companies are a major industry. So, Joe Biden voted in a way that was overwhelmingly popular in his state and Barack Obama didn’t. That’s a story?” Frank said.
Biden’s campaign spokesman David Wade said Biden and the Senate worked many years on the bankruptcy bill. He said Biden improved it “for low income workers, women, and children. There were times when amendments on both sides would have blown up a bipartisan compromise ... At those moments, Sen. Biden had to make the tough calls and voted to pass a bill.” (Edited by Howard Goller)
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