New bill introduced to try and lower credit card interest rates

[mcablue]

Source: NBC (WHEC)

Congresswoman Slaughter is proposing legislation to cap interest rates at 16 percent, and limit other unreasonable charges. She says companies would still make a huge profit.

“We’re furious about it. The notion is that were doing something wrong. Remember this was the law for years. We didn’t have banking problems then.”

Many credit card companies are racing to hike fees, slash credit limits and even close some accounts, before new federal regulations go into effect in February, leaving people who made purchases over the holidays in a bind.

Read more: http://www.whec.com/news/stories/S1336492.shtml?cat=566

[virgogal]

1. Even 16% is obscene.

[jimlup]

7. Agreed!

Since they charge each other essentially nothing. In this economy a "high" interest rate should be around 6 or 7%

[Newsjock]

2. Wonderful idea, but ...

... we're more likely to see Karl Rove and Jeff Gannon in swim trunks, deep-tonguing each other on a float in the gay pride parade than we are to see passage of a bill like this.

[WCGreen]

5. Isn't that why Rove just filed for divorce....

[WriteDown]

3. Why 16%?

What is the basis for that #?

[rpannier]

18. My guess is she has spoken to other Congress persons

and this is probably the percentage number that she could get the most support for.

[bluestateguy]

4. We've been doing too much asking and not enough telling in this recession

Asking banks to please lend more, asking companies to please hire more, asking companies to please control themselves with the bonuses, asking credit card companies to please lower rates.

Now it's time to do some telling. Yes that's right, mandate, order, require, instruct and compel.

[OhioBlue]

6. I hope it passes. n/t

[madamesilverspurs]

8. It'd be nice

if they'd also do something about the fees charged to businesses who accept credit cards. The company that handles those transactions for the bank just had us complete a 'required survey' to determine if we are compliant with security measures. A useless bit of tripe, poorly contrived; and for the privilege we got to have $55 picked from our pocket. Total scam.

grrrrrrrrrrrr.........


---

[soleiri]

10. I understand where you are coming from.

However, do you think you get more business because you accept credit cards?
If not, then why not go to a cash and check or cash only business.

Or are the fees unreasonable?
I'm just curious, because I see some restaurants will charge a dollar to use credit or atm
and I'm wondering if that's the fee that visa (or whoever) charges the restaurant.

[madamesilverspurs]

15. Our business is home based,

and like many others has been struggling of late. We do have some events where we set up to sell merchandise, brings in some cash and provides opportunity to get our information out there. Our first events were cash/check only, and quite a few people expressed disappointment that they couldn't purchase with credit cards. So, we set it up with our bank. Our non-event sales are sporadic, and if we could have the option of activating that capability on an as-needed basis we could save on the monthly fees; of course, we're told that no such option exists. We recently tried to cancel the whole credit-card thing, but the penalty we would have been charged was prohibitive. Thus, we continue to pay fees for months in which there is no activity in order to be able to process transactions at events in other months. Suckage.


---

[GOPNotForMe]

17. It's illegal for businesses to pass on their merchant fees to their customers.

Not saying that they don't do it anyway, but there is a law that bans it.

[soleiri]

9. From my experience

"Many credit card companies are racing to hike fees, slash credit limits and even close some accounts, before new federal regulations go into effect in February, leaving people who made purchases over the holidays in a bind."

If a credit card company raises your rates, you could refuse the rate increase and stop using the card. You just have to let them know.
You would then be able to pay off the balance of your card at your previous rate.
So people who made purchases over the holidays would not be affected unless they wanted to keep using the card.
Unfortunately, many of us rely on credit cards not just in emergencies, but to survive month to month.

I hope this passes.
Personally, I think if the rate that you signed up for was prime+3% then that should be your rate for as long as you have a card.
If you are late, you should get a late payment fee and not fall into penalty pricing at 30%.
I worked customer service for a bank in the credit card department for a couple of soul-crushing years.
The only satisfaction I got was reversing fees and teaching people how to get around the system.

[timefortherevolution]

12. Its not going to pass.

Please..we've all seen how beholden our esteemed Congress is to the insurance companies.

You're kidding yourself if you think for one minute this Congress and President would do anything
like interest rate caps to inconvenience the banking industry.


Get real.

Ain't gonna happen.

My wonderful senator Stabenow voted against it. She claimed that the banks
would in turn, limit credit to borrowers.

Lo and Behold! 30% interest rates and NO CREDIT AVAILABLE!

[dflprincess]

13. And, they'll remind us, they already dealt with

credit card "reform". :sarcasm:

I'm starting to get awfully nervous whenever I hear the Democrats start talking about reform - it generally seems to mean they're about to sell us out to another batch of corporations.

[timefortherevolution]

14. You nailed it. Its good cop and bad cop. They say they want reform and its all

a dog and pony show for the voters. One senator stands up for appearance sake, wagging
a finger at the banks. And a majority votes it down.


Sen. Stabenow voted down Sen. Sanders bill to limit credit card rates at 15%.

My card is now at 30%.

I will GUARANTEE that I will work my ass off to see her given the boot in 2012.

A corporate whore if ever there was one. And a Bush-lite dem as well.

[soleiri]

16. okay

I don't recall saying that it would pass, only that I HOPE it will pass.

[metapunditedgy]

11. All the Fed has to do is lend cheaply to the big banks, and they will pass on

the low rates to their customers.

(I don't know how to use the sarcasm tag, sorry.)

[rpannier]

19. The smiles look up table above the subject line is what you click

A box will appear with various tags
You click on the tag you want

Smilies lookup table

[flamin lib]

20. We need to set a national usury rate pinned to the Fed lending rate.

Once upon a time each state set it's own usury rate, most of them under 10%.

Then banks literally gave away credit cards without any scrutiny to break into small consumer lending with no security on the loans.

Then inflation ran amok and the inflation rate reached 18%. Can't borrow at 18% and lend at 10%, so what to do?

The SCOTUS ruled that the interest rate set in the home state of the lending institution applied to all 50 states regardless of state usury laws.

Banks found a state that had NO usury limit and moved all operations there. Voila! Problem solved.

Local banks were at a disadvantage, so lobbied for parity with national banks. Poof! No more usury laws at any level!

Right now the Fed is lending money at 0%. Set a max rate at, say, 15% above 0 and let it rise as the Fed rate rises. 15% is enough to cover questionable credit risks, lets face it, if a bank feels they need 30% to cover their risks they really shouldn't lend the money.

But no, the Congress will do something incredibly stupid and short sighted like they always do.

[harun]

21. Usary is wrong. Cap it.

[DebbieCDC]

22. You would think the fundies would be all over this ursury thing

After all, doesn't their bible prohibit it?