Innovation & Institutions, Will it Blend?
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Innovation & Institutions, Will it Blend?
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A Credit Card Regulation That Worked for Consumers & Banks Too

A Credit Card Regulation That Worked for Consumers & Banks Too | Innovation & Institutions, Will it Blend? | Scoop.it

"Economists found that the Card Act, passed in 2009, saved consumers billions of dollars by cutting through a tangle of credit card fees.  ...and more."


Congress decided to force down the hidden fees that credit card companies collect from their customers. It passed a law called the 2009 Credit Card Accountability Responsibility and Disclosure Act   ...It's a clear case of regulation that worked. 


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...the new law saved customers an annualized 2.8 percent of the average daily balance on cards - [$20.8 billion ...

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..the authors of the new study access to information on more than 150 million credit card accounts. They found that on average, the new law saved customers an annualized 2.8 percent of the average daily balance on cards - [a] $20.8 billion estimate.


…a surprising discovery made in the new paper: Subprime credit card holders do default more often than others, but the interest and fees they paid made them far more profitable for the banks than any other groups of credit card holders, even during the financial crisis.



“This was probably the worst period in modern history to be a lender...when banks were hemorrhaging money on subprime loans, subprime credit cards were a major source of profits.” With profits that high, banks could still do well even with lower fees.


Deb Nystrom, REVELN's insight:

Some good news:  a case study where the researchers, having low expectations that the legislation would tamp down the tendency of banks to find loopholes and raise consumer rates.  Actually, it worked, and benefitted the banks as well.   


It's cool when that type of innovation happens through, of all things, a regulation.   ~  D

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Times Higher Education - Innovation strategy 'ignores' funding and visa concerns

University strategies & policy:  Too little innovation?


Excerpt:  Wendy Piatt, director-general of the Russell Group of large research-intensive universities, welcomed many of the measures in the newly announced innovation strategy, but was disappointed it did not address concerns about postgraduate funding, or adopt the Russell Group's proposal for a new bank loan scheme for postgraduates.


She also called for more capital funding to be made available to universities, and for research to be exempted from the Freedom of Information Act.


David Price, vice-provost for research at University College London, praised the government for "the stability of its commitment to the research base" in difficult times.


He also said it was a pity the strategy's "fine words on the importance of mobile highly skilled people" had not translated into concessions regarding universities' continuing concerns about the government's new visa regulations.

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