The Washington Post on A1 says the Federal Reserve and other bank regulators will unleash “one of the most aggressive efforts in decades” against abusive credit-card industry practices. This expected wave of oversight must be real after all.
The proposed regulations, which could be finalized by year’s end, would label as “unfair or deceptive” practices that consumers have long complained about. That includes charging interest on debt that has been repaid and assessing late fees when consumers are not given a reasonable amount of time to make a payment. When different interest rates apply to different balances on one card, companies would be prohibited from applying a payment first to the balance with the lowest rate.
The Post says past efforts have focused on disclosure and notes that Congress has been itching to pass its own laws against unfair practices. The banking industry denounced the rules, but it’s a wounded dog right now.
Dow-n and out
The Chicago Tribune scoops that the Bush administration forced out the chief of the Environmental Protection Agency’s Midwest office after she went on a jihad against Dow Chemical for dumping the pollutant dioxin over most of the last hundred years. The Trib says the move was triggered by an investigation it was preparing on the matter.
The paper reports that the administrator had tried to speed up efforts to force the company to clean up its mess, which Dow Chemical has repeatedly stalled fixing.
Here’s our Quote of the Day, from the defenestrated EPA administrator:
“There’s no question this is about Dow. I stand behind what I did and what my staff did. I’m proud of what we did.”
SUV era over?
Americans are buying small cars at a record pace as spiking gas prices and the weak economy finally push them out of their Chevy Suburbans and Ford Expeditions and into Ford Focuses and Toyota Yarises
The New York Times leads its front page with a report that fuel-efficient compacts and subcompacts accounted for about 20 percent of all sales last month for the first time. That’s up from just one in eight car sales ten years ago. Four-cylinders outsold six-cylinders for the first time last month, as well. The Los Angeles Times calls the small-car gains “colossal.”
The NYT calls it a “blow to Detroit automakers,” since they have fewer small models than the Asian automakers and have been more dependent on sales of light trucks like SUVs. SUV sales are off a quarter from last year.
The Times says this appears to be a landmark shift, the real deal after false starts in the past caused by temporarily spiking energy costs. This one is also helped along by the suffering economy.
Previous spikes in sales of smaller cars were often a result of consumers trading down during tough economic conditions or gas-price increases. When the economy improved or fuel prices dropped again—as they did after the oil-price shocks in the 1970s ease— buyers invariably went back to bigger vehicles.
But with oil prices expected to remain high for years, auto industry executives are seeing a turning point. “The era of the truck-based large S.U.V.’s is over,” said Michael Jackson, chief executive of AutoNation, the nation’s largest auto retailer.
The automakers are betting gas prices aren’t ever going back to a buck a gallon. They’re shifting “just about everything” into small cars, a J.D. Power analyst says. The Wall Street Journal reports on its Marketplace front that car-makers are going to start selling electric cars that recharge via wall socket, but utility companies are raising concerns that a wave of plug-ins will overwhelm their systems during the day. Regardless, the oil-price spike is boosting the prospects of rechargeable cars.
The Journal is makin’ sense here:
The fastest way to reduce demand is to keep prices high, forcing motorists to drive less. Higher gas prices would spur development of new technologies, such as hybrid cars, that don’t make economic sense if gas is cheap. It will take years before widespread availability of hybrids would make a big dent in gas demand.
But here come the politicians. The WSJ reports on A4 that Democrats in Congress are about to propose a series of measures to ease gas prices, including a pause in the program that stockpiles emergency oil reserves, stricter requirements for speculative trading, and a windfall-profits tax of up to 25 percent on oil companies.
Exxon keeps making record profits
Speaking of windfall profits, Exxon Mobil missed analyst estimates by $600 million and still raked in a record $10.9 billion in first-quarter earnings, up 17 percent but less than Wall Street expected.