Plastic Capitalism: Banks, Credit Cards, and the End of Financial Control

Vanatta, S. (2023) Plastic Capitalism: Banks, Credit Cards, and the End of Financial Control. Yale University Press: New Haven. (In Press)

Abstract

Plastic Capitalism is a history of the bank credit card industry from its origins in the early 1950s until the relocation of card-issuing banks to places like Sioux Falls, South Dakota, and Wilmington, Delaware, in the early-1980s. Bankers, the book shows, embraced credit cards as a new source of growth and profit within the highly regulated financial system of the early post-World War II years. Although they initially developed card plans within the system’s regulatory boundaries, bankers eventually used cards to transform postwar consumer credit markets and escape the rules entirely. Until the 1980s, however, other stakeholders—state and federal policymakers, consumer and labor groups, and even concerned U.S. Presidents—used the financial system’s regulatory levers to constrain bank card plans. They shaped financial industry rules to match their expectations for economic fairness and the appropriate role of unsecured credit in American’s rapidly changing consumer society. They did so, often, by turning to the states. U.S. financial policy worked through a dynamic, evolving, and flexible relationship among state and federal rules. Banks, however, ultimately turned federalism to their advantage. In the early 1980s, large firms like Citi and Chase Manhattan relocated their card plans to South Dakota and Delaware, states with the weakest consumer regulations. The banks created “on-shore” financial havens that exported lax laws across state lines, drawing Americans into an exploitative credit economy over which they had little control. Federalism, which had been a source of regulatory strength, became instead a vehicle for driving regulatory weakness.

• Item Type: Books
• Status: In Press
• Glasgow Author(s) Enlighten ID: Vanatta, Dr Sean
• Authors: Vanatta, S.
• Subjects: E History America > E151 United States (General); F History United States, Canada, Latin America > F001 United States local history; H Social Sciences > HC Economic History and Conditions; H Social Sciences > HG Finance; J Political Science > JK Political institutions (United States); K Law > KF United States Federal Law; T Technology > T Technology (General)
• College/School: College of Social Sciences > School of Social and Political Sciences > Economic and Social History
• Publisher: Yale University Press