Obama calls for credit card legislation

[firedupdem]

WASHINGTON -- Send me a bill that stops credit card companies from taking advantage of consumers, and do it by month’s end, President Barack Obama is demanding of Congress.

But there’s no guarantee lawmakers will deliver by Memorial Day, and the banking industry is fighting back.


“Americans know that they have a responsibility to live within their means and pay what they owe,” Obama said in his weekly radio and Internet address today. “But they also have a right to not get ripped off by the sudden rate hikes, unfair penalties and hidden fees that have become all too common.”


Legislation known as the Credit Card Holders’ Bill of Rights has passed the House and awaits action in the Senate, possibly in the coming week.


“You shouldn’t have to fear that any new credit card is going to come with strings attached, nor should you need a magnifying glass and a reference book to read a credit card application. And the abuses in our credit card industry have only multiplied in the midst of this recession, when Americans can least afford to bear an extra burden,” the president said.


The House measure would prohibit double-cycle billing and retroactive rate increases, and prevent companies from giving credit cards to anyone under 18.


Obama wants to sign the legislation by Memorial Day. “There is no time for delay. We need a durable and successful flow of credit in our economy, but we can’t tolerate profits that depend upon misleading working families. Those days are over,” he said.


Railing against what he said was “abuse that goes unpunished,” the president stressed the need “to strengthen monitoring, enforcement and penalties for credit card companies that take advantage of ordinary Americans.”

http://freep.com/article/20090509/NEWS15/90509015/Obama+wants+law+to+end+credit+card+ripoffs

[FrenchieCat]

1. I just sent a couple of LTTEs on this very topic this morning.

It's gotta happen.

26% of my balance added to my credit card is killing me!

[HopeOverFear]

2. "those days are over" GOBAMA!

[Lord Helmet]

3. I'm a student and my cards are in good stnading. They screwed me anyway.

[wisteria]

4. The bill does not go far enough to be a big help to consumers.

It does nothing to cap interest rates or even apply more of a payment to the principal owed. And, major benefits to consumers regarding fair business practices do not go into effect until 2010. Frankly, all the new provisions do nothing to help consumers pay down their debt to credit card companies. Personally, I don't care to have more credit- I just want to pay my balances down to zero, but with the interest charges and the already large minimums, I can't get ahead.
Unfortunately, I am disappointed this is being hyped as it is when it's obvious it does little for those struggling to do the right thing and pay off what they owe.
Now, I do not mean this as a slam against our President, I recognize he had to compromise on this, but for those waiting for a life line- this isn't it.

[dflprincess]

5. Yeah, that clause that the major protections won't go into a effect for a year is a joke

It gives the croooks another 12 month to squeeze as much as they can out of their customers and certainly looks like it's another attempt by Congress to appease their major donors while trying to fool their constiuents.

[vaberella]

9. Yeah, but at least it goes into affect. At least we'll get that through. n/t

[Tarheel_Dem]

6. Recommended. Of course the whiners won't see this as enough. For them,

nothing is ever ENOUGH. I think this is an admirable move for the President and Congress. Although, I haven't been affected by some of the horror stories I'm hearing about sudden rate hikes and penalties, I'm glad they are working on this.

[Skittles]

7. it probably WON'T be enough

but maybe a start would be good

[vaberella]

11. The point is that we have the start.

You know that if this was McCain we'd all be on a soup line, months ago. Plus, O can't turn 8 years of damage into perfection in days. The start is one thing that should get everyone excited especially if it can lead to some major progress. We have enough Repubs and blowhard Dems fucking us up with every bill or piece of legislation that I'm even surprised this might get through.

[Skwmom]

16. These excuses are getting really old and tiresome.

McCain isn't in office. We are not asking for perfection and how difficult should it be to pass meaningful legislation that would be supported by the vast majority of the voting public?

The credit card companies, the same companies raiding the U.S. Treasury and indebting our kids for generations, are acting like predatory loan sharks.

No one is asking for perfection. We're asking for credit card legislation that actually protects the consumer rather than reminds us of the p.r. stunts the Bush admin used to pull.

I heard a while back that new credit card rules are going into effect anyway so that passing this legis. will only move up the implementation date of new requirements by a couple of months (if true, that makes this credit card legislation even more likely to amount to nothing more than a p.r. stunt).

[vaberella]

17. Let's be serious.

It doesn't matter how much it's supported by the voting public the voting public is not sitting there saying, "Aye," or "Nay,". If you really believe that these people in office sit there and seriously think about the benefit of the American people overall apartheid in America would have ended when Blacks were considered "free." Shoot, a bit more present Gore would have been President. We have people in office who don't give a rats ass about passing meaningful legislation if it has nothing to do with deep pockets. Secondly, you may find the argument old, but there are Dems that are just as bad as Repubs---the D or the R after their name means nothing.

As for the last part...post me a link. I haven't heard that at all and could just be a wishful thinking rumor.

[vaberella]

10. I couldn't agree with you more. n/t

[Skwmom]

14. Yes, God forbid that we might want legislation that actually

protects the consumer. :sarcasm:

Credit card companies are switching from charging a fixed rate to charging whatever the prime rate is PLUS so a stated percentage. When inflation hits, and it will because of the money being printed to help out these crooks, interest rates on credit cards will SOAR. So not being able to retroactively raise interest rates will be MEANINGLESS b/c the interest rates will just adjust with the prime rate. There needs to be a CAP on credit card interest.

Calling me a whiner won't deter me from speaking out. Neither does it deflect from the fact that without meaningful legislation it's not more than a p.r. stunt (something this board would have rightfully slammed the Republicans for).

The blind support of a President because he has a D or an R in front of his name is destroying this country.

[Tarheel_Dem]

20. Mmmm....okay.

"The blind support of a President because he has a D or an R in front of his name is destroying this country."

Tear up the credit cards? Just a suggestion.

[nickinSTL]

18. whiners? who the hell are you?

it's NOT enough.

For all of those who are being SCREWED by the greed of the credit card companies, it is NOT enough.

My parents, who have good credit and don't miss payments, are among those being hit by the insane almost 30% interest.

It's fucking usury, which should still be a crime, IMO.

It must be nice to be in a position where you can criticize those who "whine" about being screwed by these evil corporations.

It's nice to see Obama trying to put SOME limits on the evil, but it is NOT enough.

[Tarheel_Dem]

21. I know...blah...blah...blah...

The evil credit card companies made you go out and buy that 72" plasma teevee. I think it's time for people to accept some responsibility for their own reckless greed. I'm not defending usury, but I don't get how it's ALL the bank's fault that people have overextended themselves to the point where the Obama administration is now expected to bailout them & the banks.

My parents taught me about the evils of credit cards and reckless spending. As a result, I don't have to have the latest toys, if I can't afford to pay for it. I have a couple of credit cards, but I don't charge more than I can pay off when the statement comes. People have to learn to be smart consumers, and it's worth being educated on debt to income ratios. If my CC company does something I don't like, I pay what I owe, and tear up the card. It's pretty simple....really.

[dflprincess]

22. My friend ran up her credit cards helping her parents pay

their medical expenses.

A lot of people have run up credit card debt covering medical expenses or car repairs or even food when the money runs out before payday. Do not jump to the conclusion that everyone with credit card debt has it because they've been buying bigger TVs. Given that medical bills account for over half the bankruptcies in the country, it would be interesting to know how much of consumer debt is driven by our lousy health care system.

[Tarheel_Dem]

25. Please point out where I said "everyone". I am not unsympathetic, but

it seems that any advances the president makes just aren't appreciated by a very vocal minority here. As you say, it would be interesting to see a study of just how we've arrived at the point where nearly everyone is living on credit. I have two credit cards, and no one forced me to sign on the dotted line. Some of us have lived within our means, and don't expect our debt to be wiped out because there's a Democrat in the White House.

[Robb]

24. I think you would find those 72" TVs are less common than you think.

When you get sick, and you don't have insurance, you go wherever you can to pay to get well. It's fucking appalling, actually, that it works that way. And it's a lot more expensive than a big TV.

The number of people who don't have insurance is probably startlingly close to the number getting killed by these bad rates.

So, no. It's not all the bank's fault. There is also the lack of jobs, lack of insurance, and a broken health care system.

...But don't you DARE put the onus on those who are being screwed by this to "get educated." Take your own advice.

[Tarheel_Dem]

26. Ever hear of "Buyer Beware"? This crap started in the 80's, when..

impulse buying, and carrying a load of credit card debt almost became fashionable. We forgot the lessons of my parents' generation, who lived through the depression, and lived quite modestly, and most of all, they knew the value of saving money.

I feel sorry for those who have been wiped out by medical debt, but that excuse doesn't cover everyone who's drowning in debt.

[Robb]

27. Bootstrap nonsense

Almost 14 million Americans unemployed, 50 million uninsured, 46 million upside-down on their mortgages, and you think the answer is to learn from your parents' generation? :eyes:

[Tarheel_Dem]

29. Well, my parents were never "upside-down" in their mortgage, were

never "uninsured", and to my knowledge, were never "unemployed", and were never college educated. For a black family raising 11 kids, and sending 7 of them through college, I'd say they did something right.

The generation that came along after mine decided to live their lives on credit, because instant gratification became all the rage in the 80's. If your neighbor buys a Yukon, do you have to run out and by a Hummer, just to keep up? NO. Whatever happened to saving until you could make a sizeable downpayment on that dream home? Or saving up so that you can pay cash for that big television set that covers a whole wall? I'm sorry, but some of these wounds are self inflicted.

For the record, I hope the people who played by the rules, and lived within their means get the help they need.

[Triana]

8. Bank of 'Murica just sent me a nastygram about increasing fees....

...bastards.

[cooolandrew]

12. This will be a huge help to a lot of people and something left and right can get behind. n/t

[Mariana]

13. I wish they would cap the damn rates.

30 percent is just plain too high.

[Skwmom]

15. 30 percent is going to look good when inflation hits.

And inflation is going to hit because of all the money being printed for these crooks.

[dipsydoodle]

19. There is an oddity here

because this just doesn't happen in the UK where the rates are the rates with no distinction whatsoever between users.
The only thing that differs between users is the credit limit made available. Also, broadly speaking, rates only change when bank rates do. The change does affect all of an outstanding balance.

As far as I'm aware credit cards have never been made available here to under 18's.

[jeanpalmer]

23. Might want to consider getting rid of them

They provide nothing to the economy over the longer term -- purchases made on credit boosts the economy today but robs tomorrow's spending by a greater amount (amount of debt + interest). And eventually, the overhang of credit card debt acts as a drag on the economy, as it is doing now.

Additionally, the rate of interest charged is outrageous, almost always usurious.

And the money is almost entirely used for consumer spending, day-to-day expenses that people would be better off budgeting for. There's no investment aspect to it at all.

And it adds another layer of bureaucracy onto the economy, which amounts to an inefficiency.

What's required, at a minimum, is a cap on rates to eliminate the usury aspect. Fed funds rate + 3%. Banks can make a lot of money with a 3% markup. That would put a current cap at 3%, very reasonable.

What are the chances Obama will try to eliminate the usury? Do 15%, 20%, 30% rates bother him enough to do something about it. I doubt it. Instead he talks about "sudden" rate hikes, "unfair" penalties, "hidden" fees. So if they're not "sudden, unfair, or hidden," even if they're 30%, that's ok with hm. This is more flim flammery.

[LatteLibertine]

28. Good 'ol BoA

As another said they are the number one recipient of TARP funds and they are going to hit people with increased fees. Looks like they are getting the taxpayer twice. If you can afford it, pay the cards off now, and cut 'em up. Switching to a bank that's well in the black and that isn't taking TARP funds might be a good idea too. I just did all of the above.

BoA can kiss my rear.