March 25, 2006

There's a good chance you have something that Ralph Nader doesn't — a credit card.

"I do not have a credit card," the consumer advocate told an audience of about 350 at Rochester Institute of Technology Friday afternoon. "I have never had a credit card. And I will never have a credit card."

He doesn't like the invasion of privacy.

"Privacy, of course, is constitutionally protected, but not statutorily protected," he said. "There's an interesting discrepancy there."

He says credit cards increase the price of the goods we buy. They can tempt people to overbuy. Cardholders are exposed to "all kinds of rip-offs."

"And generally speaking, it's none of other people's business what products you buy and when you buy them," he said. "But in the credit card economy, it is."

Nader took his shots at the credit card industry during a lecture on the problems created by banking deregulation.

The speech was sponsored by RIT's College of Business, which also announced Friday that it was establishing a research center and academic concentration in consumer financial services.

Robert Manning, business professor and author of Credit Card Nation, will be director of the center. The new bachelor's degree in business will give students training in the areas of personal finance/debt.

And that, Nader says, is something virtually all of us need.

"We are losing control of our money relentlessly, year after year, and not even mobilizing against it," said the three-time Green Party presidential candidate.

He said that deregulation of the banking industry allowed the creation of superglobal banks that combined services such as insurance and financial services that until deregulation had not been permitted by law. And most usury laws were eliminated, allowing the banks to charge huge late fees and other charges.

He sees a day when 10 superbanks will be all that's left at the top. And that, he says, is a recipe for disaster.

"Studies show, the less likely to provide loans to small businesses, the bigger the bank," he said. "The more likely to charge high fees and penalties, the bigger the bank."

The large banks say larger organizations can both create more variety in products for consumers and create economies of scale to control escalating costs.

Nader urged the audience, which was mostly RIT students, to join New York's Public Interest Research Group, which he founded. He urged them to band together to become more informed and educated about matters financial.

And some in the audience took his message to heart.

Michael Collins, 22, an RIT senior from Jordanville, Herkimer County, called Nader's message "hopeful."

"I enjoy his passion," he said. "And I see it as a lot of little battles."

Collins said he has a credit card, which he pays off at the end of the month.

"But when he says he doesn't have one, it definitely made me reconsider it," he said.

Fairport resident Dave Prosser, 62, said he carries three credit cards in his wallet, but never carries a balance from month to month.

"I came away from the discussion with knowledge and awareness, but I don't know if I came away with what can be done to help," he said. "I don't think we're going to see everybody in the United State throwing away their credit cards."

The RIT research center and academic major in consumer financial services will not exclude businesses, Manning said.

"We're going to have a mix of people that are focused on consumer interests, focused on corporations and their future," he said. "I'd like to see this center be a point where if a Sarbanes-Oxley Act is passed, insurance groups, consumers and bankers can get together for a quick weekend and say, 'What is this going to mean for us?'

"I think we're strategically positioned here in Rochester so that we're not so tied in to New York City that we can't see the forest for the trees. And at the same time, it really is convergent with (RIT President Albert Simone's) interest of raising RIT to a Category One national institution," Manning said.

"By doing this, we're going to be training a whole generation of people who are going to be employed in the financial service industry as career professionals."

FBILOV@DemocratandChronicle.com

This story ran on on March 25, 2006.