Caroline Melear

Financial Services Public Policy @RSI | Former Equity Analyst | Columnist @conservateurmag | Contributor @YoungVoicesOrg

[Caroline Melear @CarolineMelear]

“The root of the issue with financial consumer protection rules is that they degrade the responsibility necessary for freedom to flourish. Liberty cannot truly exist without personal responsibility, and consumers give up more of their liberty each time the government places a ‘pro-consumer’ mandate.”

[R Street Institute @RSI]

Liberty Requires Responsibility https://t.co/uANmBEtmxD @CarolineMelear

[Caroline Melear @CarolineMelear]

@InfalliblePuma @tylercurtis42 Fair critique. At least you know I didn’t use AI! 😂

[Caroline Melear @CarolineMelear]

Reminder: credit cards provide unsecured credit with a free 30 day float. In order to make this financially feasible, interest rates must be higher. If people would like to start providing collateral instead, they can get lower rates (though they probably won't like the terms!)

[Andrew Lokenauth @FluentInFinance]

Credit card companies shouldn’t be allowed to charge 34% interest.

Why is the Government okay with interest rates this high?

[Caroline Melear @CarolineMelear]

@brianJshearer I will take a look!

[Caroline Melear @CarolineMelear]

@brianJshearer I think what you’re essentially saying is they can afford to provide credit at 10%. This is similar to how Ds viewed debit interchange and since implementation consumers lost debit rewards, saw reduced access to free checking, and did not receive any savings.

[Caroline Melear @CarolineMelear]

@turbodsm I don’t believe in paternalism, I do believe responsibility is a requirement of liberty. Aside from that, this will negatively effect more than 100 million Americans who enjoy and rely on credit cards, more than 50% of whom pay off their balance in full each month

[Caroline Melear @CarolineMelear]

@turbodsm I like limited government and economic freedom

[Caroline Melear @CarolineMelear]

@justin_hart It’s one of the craziest aspects of the proposal, that they chose 10% as a static number (at random, apparently) and didn’t even bother to peg it to any underlying rate

[Caroline Melear @CarolineMelear]

@cat_coake This is not how markets work. People will then turn to even more nefarious forms of lending. You cannot regulate their needs out of existence but you can make them far worse off by banning their access to safe forms of credit which have built in consequences for poor repayment

[Caroline Melear @CarolineMelear]

@cat_coake Loan sharks and payday lenders are predatory, which is where people will be forced to turn when they're no longer eligible for credit cards with a 10% cap.

[Caroline Melear @CarolineMelear]

@cat_coake I have 4 credit cards and I've never paid a cent of interest. It's not predatory, it's individual decision making.

[Caroline Melear @CarolineMelear]

@GerryLond @RogueCfpb this is BNPL and dems at the state level are already trying to regulate it out of existence

[Caroline Melear @CarolineMelear]

@Seanfucious @JBSDC Fair, I'm probably being a tad too pessimistic about consumer awareness haha

[Caroline Melear @CarolineMelear]

@Kektimus @EWErickson good point!

[Caroline Melear @CarolineMelear]

Part of the reason APRs rose over that time period is because of the CARD Act which limited fees, shifting those costs to APR. You can fully expect that an APR limit would likewise shift fees.

This does not serve to solve anything, just further entrenches market distortions.

[NotChazz @DaaChazz]

@JRStaffa The average credit card APR in the U.S. was under 13% throughout the 1990s and early 2000s, and people with sub-700 scores still got cards every day

[Caroline Melear @CarolineMelear]

@Seanfucious @JBSDC I think it's also possible that consumers don't make that connection at all and instead blame it on the "greedy" CC companies

[Kelley K @KelleyKga]

If you think credit cards have high interest rates, you should see the rates on payday loans, which is what people get when they can't get credit cards or they've already maxed them out.

[Caroline Melear @CarolineMelear]

@LordRathma People will always need access to capital. An individual’s ability and willingness to use their financial freedoms responsibly is another conversation entirely.

[Caroline Melear @CarolineMelear]

@tylercurtis42 the 10% number is completely obscure, not based on anything. Just a round number that sounded nice. Hopefully it's all just political pandering though I fear it's not

[Caroline Melear @CarolineMelear]

@pat_hedger it's such a crazy argument really. We should obviously allow people to have access to safe forms of unsecured credit should they need it, and caps will only introduce scarcity.