Great idea to me. Does anyone have an argument against it?
Selfishly, I wouldn't like it. I get about $1500 a year back in cash back from using credit cards (without doing any real work or churning to maximize rewards). If banks took a hit on the more profitable customers, they wouldn't be able to be as generous for us "dead beat" customers that they don't make as much money off of.
But just generally, I don't like it. If we're going to regulate lenders, I think CC's should be far from the first target. It's a very risky business they are in, offering revolving unsecured loans. When times get bad, it's the CC's people stop paying first, and of course, going to go away in bankruptcy. Even title loans have some kind of collateral, and of course, charge far more than 15-20%.
As long as they are clear about the fees (some subprime cards aren't), I say let CC companies do their business the way they see fit.
And frankly, if the states are going to keep sponsoring lotteries, then just stop pretending to care about other companies preying on broke people making bad decisions.
Now, as I mentioned in the student loan thread, I'm not sure that 18 year olds should be allowed to take on debt, and that would affect CC's, of course.