In 2009, the US government passed bipartisan legislation
designed to make the credit card industry fairer, and hold down credit
card fees. Economists are flabbergasted to find that it did those
things.
Floyd Norris reports
that when economists decided to study the effects of the law, they
expected that they would be negligible, due to cunning credit card
companies finding loopholes and such. Nope:
But his expectation was wrong. The study came to a conclusion that surprised Mr. Mahoney and his colleagues: The regulation worked. It cut down the costs of credit cards, particularly for borrowers with poor credit... [The economists estimate] that the law is saving American consumers $20.8 billion a year.
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