Democratic VP Nominee Long Viewed as Ally of Credit Card Banks

Presumptive Democratic vice presidential nominee Senator Joe Biden (D-Del.), unlike many others in his party, has had a pro-financial services bend during his years in the Senate, according to various media reports following his addition to the ticket.

According to The New York Times, one of Biden’s sons was paid an undisclosed amount of money as a consultant by MBNA, the largest employer in Delaware, during the years the Senator supported legislation that was promoted by the credit card industry.

The legislation in question was the Bankruptcy Reform Bill of 2005, which changed bankruptcy rules to the extent that there were a rash of filings before the bill was enacted and a subsequent drop-off the following year. Presumptive Democratic presidential nominee Barack Obama (D-Ill.) opposed and voted against the legislation, as did most Democratic members of Congress.

MBNA was acquired by Bank of America in January 2006 (“Bank of America Completes $34 billion MBNA Merger,” Jan. 3, 2006). After the acquisition, Bank of America decided to keep the credit card bank charter of MBNA in Delaware to take advantage of favorable corporate tax laws.

The New York Times and The Wall Street Journal have reported that Biden accepted more than $200,000 in campaign contributions from credit card company MBNA during his 35-year career in the U.S. Senate. Biden also was referred to in another Times article as the “Senator from MBNA.”

Due to its tax laws, which include no corporate income tax, Delaware is the state where a majority of corporations, including many financial services firms, are headquartered. Many of the financial services companies, including Capital One (NYSE: COF) and Bank of America (NYSE: BAC), also have significant operations in the state.

Biden’s long support of banking interests casts a doubt on whether the Democratic ticket will formally support credit card reforms proposed by the Federal Reserve and Democratic members of Congress. Obama’s platform already calls for extensive credit card reforms, including the passage of a “Credit Card Bill of Rights” for consumers similar to one that has already passed by a House committee (“Consumer-Friendly Credit Card Bill Passes House Committee,” Aug. 1).