Zywicki discusses some recent data concerning bankruptcy filings and interest rates, stating that the data supports the recent reforms and undermines the arguments against the reforms. Near the end, after discussing a pre-April surge in filings, says this:
This also suggests that when the legislation goes into effect in October (after the 6 month lag), bankruptcy filing rates would be predicted to fall, and credit card interest rates will be predicted to return to their historic rates below rates for personal loans (everything being constant).
Assuming the cogency of the reforms, shouldn't the interest rates fall below historic levels? After all, the reform argument (in part) was that with the reforms there remove or lessen the subsidy of the profligate on credit cards and those of us who are good would have even lower rates. (Assuming that the issuers can discriminate among applicants on credit-worthiness, etc., which they have been able to do for some time).
As for the reforms themselves, I think they are a mixed bag. But that is a subject I would prefer to skip over for now.
Recent Comments