New regulations for the credit card industry; Americans are buying smaller cars.

New regulations for the credit card industry; Americans are buying smaller cars.

New regulations for the credit card industry; Americans are buying smaller cars.

A summary of what's in the major U.S. newspapers.
May 2 2008 6:06 AM

Size Matters

The Washington Postleads with word that three federal agencies will announce today a set of new regulations on the credit card industry  that could put an end to some of the sector's most criticized practices. The Federal Reserve, the Office of Thrift Supervision, and the National Credit Union Administration have joined forces to create the new regulations that could be finalized by the end of the year. The New York Timesleads with the increasing popularity of smaller cars. In April, about 20 percent of vehicles sold were "a compact or subcompact car," which may not sound like much, but industry analysts say the rate is unprecedented.

The Wall Street Journal leads its world-wide newsbox with President Bush's issuing of a proposal yesterday to increase international food aid by $770 million to help deal with rocketing food prices around the world. USA Todayleads with a look at how the Democratic presidential contest is being increasingly funded by small donations of $200 or less. Of the total $194 million that the Democratic contenders collected in the first three months of the year, more than half came from small donations. "Donating to campaigns for so long has been the exclusive domain of an elite few," said a campaign finance expert. "This election seems to be the first one to indicate that's changing." The Los Angeles Timesleads locally with word that aides to Gov. Arnold Schwarzenegger are exploring the idea of new tax hikes, but the paper goes high with a look at how lawmakers are feeling pressured to cut farm subsidies now that food prices are on the rise.

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The new regulations on the credit card industry would slap the label of "unfair or deceptive" on certain practices, such as increasing interest rates for seemingly no reason and slapping late fees on consumers who aren't given enough time to pay, among others. The new regulations would be a marked change from the past since federal agencies have usually limited themselves to requiring the industry to do a better job at disclosing the fine print. But several lawmakers and consumer groups have long been critical of the Fed for failing to take action to regulate card issuers, and it seems like they're finally listening. Still, some said that the regulations don't go far enough and want lawmakers themselves to take action. Not surprisingly, the banking industry is not happy about the new regulations and insists they would make credit more scarce.

While the switch to smaller cars might help decrease the nation's oil consumption and increase consumers' pocketbooks, it means  bad news for Detroit automakers. Not only do Asian carmakers manufacture more of these smaller cars, but the automakers also make a heftier profit from SUVs, sales of which have decreased more than 25 percent this year. Although bad economic times or high gas prices have translated into bigger sales for smaller cars in the past, industry experts think this change is here to stay as the price of filling up the tank isn't likely to decrease anytime in the near future. "The era of the truck-based large S.U.V.'s is over," said the head of the country's largest auto retailer.

USAT also fronts Bush's proposal for the extra food aid, which would be issued on top of the $200 million increase that was instituted last month. Overall this increase would bring the total amount of U.S. food aid to about $5 billion in 2008 and 2009. Democrats welcomed the proposal but many said it was too little, too late and questioned whether it would do enough to alleviate the current crisis if the extra money isn't available until the next fiscal year. The WSJ notes that the spike in food aid is bringing renewed vigor to the debate about how this assistance should be given. While Washington traditionally gives out food aid by handing out food that was grown in the United States, many think it would be more efficient to buy more food directly from developing countries. The administration supports changing the way food aid is handed out, but the shift is opposed by American farmers and the U.S. agriculture industry.

Going against the wishes of farmers, however, may not be the sin it once was, reports the LAT. Although politicians have long been wary of upsetting farmers, it seems the tide is turning. President Bush has threatened to veto farm subsidies that help "multimillionaire farmers," and lawmakers are talking about decreasing the incentives for ethanol production, which seemed like a Washington darling just last year. The backlash seems to have caught lobbyists for the agriculture industry and farm-state lawmakers by surprise, but they're quickly devising a strategy to fight back.

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The NYT fronts a look at how Wall Street and Main Street are, once again, moving in different directions. It was only a few months ago that Wall Street was doing badly while the overall economy kept chugging along at a decent pace. Now, the situation is reversed as Wall Street seems to see a light at the end of the tunnel and is pushing up the stock market. "There has been a huge change of sentiment in all of the markets," one investment strategist said. Some on Wall Street think there will be a sharp recovery in the second half of the year, but others insist they're just being optimistic and it's only a matter of time before the markets fall again.

In case any more proof was needed of what a strange place Wall Street is, yesterday provided a handy example. Exxon Mobil reported a first-quarter profit of $10.89 billion, a 17 percent increase from last year and the second-best in the company's history. But that wasn't enough for Wall Street, which was expecting bigger numbers, and the oil giant's shares fell 3.6 percent. But the numbers were high enough for several lawmakers to push for a tax hike on oil companies' profits.

Many think Clinton's chances of clinching the nomination have improved as Obama has suffered numerous blows in the past few weeks, but the NYT takes a look at how the former first lady still faces a decidedly uphill battle. Clinton's campaign suffered "an embarrassing defection" ( LAT) yesterday when Joe Andrew, a longtime ally of the Clintons, switched his support to Obama. That may be just one vote, but most superdelegates seem to agree with Obama's view that they should back the candidate who has amassed the largest number of pledged delegates. Clinton advisers recognize it won't be easy but think there's a path that could lead to the nomination. In order to have a chance, Clinton must win Indiana, gain respectable numbers in North Carolina, and win a surprise state, such as Oregon or Montana. Then the Democratic National Committee would have to agree to seat at least some of the Michigan and Florida delegates, and the campaign would have to convince superdelegates that the votes in the two states should count toward the overall tally.

The WP fronts news that Deborah Palfrey, commonly known as the "D.C. Madam," apparently hanged herself yesterday, two weeks after she was convicted of running a prostitution ring. Palfrey was facing about four to six years in prison and had previously told a journalist she'd rather die than spend time behind bars. "Maybe we feel sad because of the gendered irony," writes the WP's Monica Hesse. "The powerful men whose names surfaced in the scandal … have all remained unscathed."

Yesterday marked the fifth anniversary of Bush's now-infamous "Mission Accomplished" speech, and Democrats seized on the opportunity to point out how the administration was oh-so- wrong about the challenges the United States would face in Iraq. The White House press secretary appeared to come prepared yesterday to face questions on the topic. "President Bush is well aware that the banner should have been much more specific," Dana Perino said, "and said mission accomplished for these sailors who are on this ship on their mission." The Post's Al Kamen quips, "The problem, sources tell us, is that White House planners couldn't figure out how to get all that on the sign in letters large enough for people to read on television."

Daniel Politi has been contributing to Slate since 2004 and wrote the Today’s Papers column from 2006 to 2009. Follow him on Twitter.