Credit Cardholders' Overdue Bill of Rights

If there was any bill that is overdue, it is the Credit Cardholders Bill of Rights.

Adam Levitin of the blog site Credit Slips has posted on the subject today. Credit Slips is a University of Illinois-based joint site of a group of academics (the other universities represented: Harvard, Georgetown, Michigan, Ohio, and Iowa) concerned with and about credit and bankruptcy issues. Levitin favors the bill, H.R. 5244, introduced by NY Rep. Carolyn Maloney.

Levitin notes that the bill has some omissions -- "it doesn't deal with problems of price structure, rewards programs, antitrust, merchant fees, or identity theft prevention" and he observes that even with the bill, "the card industry might well find other ways to extract rents from unwitting cardholders even if the ways enumerated in the bill are shut down."

Exactly. The bill addresses only the worst abuses of the industry. It should not attempt to solve every problem. The bill has a better chance of sailing through Congress if it obtains the support of some credit card issuers who are following best practices. It should also create an incentive for issuers following best practices to educate the public about the worst practices.

Would we be having our current and future mortgage raft of foreclosures if the public had been better educated about mortgage practices, good and bad? Financial education should be part of the goal of the bill.

Credit Slips says that Rep. Maloney's bill is the most important credit card legislation in 40 years. It concludes that the bill is "an important first step to reining in an industry that has run wild in a regulatory no-man's land of outdated and threadbare federal laws, preempted state laws, and somnolent consumer protection by federal banking regulators."

This is a nice piece of writing. It includes an accessible primer on the ways that consumers have been hoodwinked on a grand scale by the ploys and practices of some credit card issuers. Support the Credit Cardholders Bill of Rights.

Comments

[realitytrumpsbull]

No card=no problem. Roll up those card companies, and have done with usury against the Murkenpublik. Reform, change, end usury. North Dakota or whatever will have to go back to raising cows or cricket milking or something, anything, just shut down the cardbiz. Too many people hurt by it over the years.

[WorkingClass]

I do menial work, full time for $9.50 per hour. I'm a 63 year old white guy. I have been divorced twice and taken bankruptcy twice. I am at peace with being a loser. I tell you this to establish my credentials in the field of household finance among the working poor. Many of us don't have credit cards. If we happen to get one we max it out immediately with no thought of ever paying it back. Those of us who can make payments are struggling to keep our credit cards because they are the only safety net there is. People who are previously middle income are joining our ranks every day. Most of them are "living" on credit cards. Down here on the bottom of the economy a sober observer can see unemployment all around like a flash flood. Soon, within months I am guessing, many millions of working class Americans will stop making payments on their credit cards due to unemployment. So the credit companies will finally get what they deserve. Nothing.

[babybelle]

The new 2005 bankruptcy bill was a gift to the credit card co's.

Obama voted against the 2005 bankruptcy bill .
Clinton was absent, so no vote was cast.
McCain voted for the BK bill.

Outlaw the fee harvesters.
They prey on the newly bankruptt, the poor, the desperate, and those
who don't understand what a trap they are getting into.

[MagisterLudi]

This bill has little chance of passing if Barack becomes President.

Barack voted NO on Dayton Amendment to the 2005 bankruptcy bill that would cap credit card rates at no more than 30%. I guess Obama agrees with his lobbyists donors that 40% interest is a "reasonable" interest rate.

So much for being progressive.

[shamanbart]

Obama stated that he voted against the amendment because 30% is too high. Get your story straight.

[nativist]

I wish in the final markup of the bill they would include language to prevent banks and other institutions access to one's credit report solely for marketing purposes. This is the number one cause of identity theft, that is, unsolicited mailers containing credit offers. Instead of a limited time "opt out" option, Americans should have an "opt in" option if they wish to recieve offers through the mail.

Arkansas used to have an effective usury cap and banks still did business there. As I recall, it was about 12%. Prime plus five works for me and cap the BS fees as well.

Lastly, let's outlaw car title loan shops. We had them out of GA for awhile. Now they're back again since some of our state legislators have a vested interest in their return. Guess the only way to stop this greed is at the Federal level..

[LeonBNJ]

Now if they would do the same thing as to installment credit, car loans, bank accounts and other financial contracts, then we might be getting closer to the way things should be. I do agree there should be as other posters suggested on credit cards as to a usuary caps on interest rates, late fees and other penalty fees.

[Wiredwilly]

The Bill has a better chance of passing when Congress realizes The People are beginning to think about what George Washington , Thomas Jefferson, and Patrick Henry would have done if they were handed a credit card bill with 32% interest due to King George the lll. A usury cap of 24 % is still pandering to greed. An interest rate cap of 7 or 8 % sounds more pleasing to the ear of the National economy.

[Donk]

How about a National Usury Cap at 21 or 24% APR? If you can't profit at that outrageous rate those people shouldn't get unsecured credit! Plus, a $20 cap on late fees and a ironclad credit limit to prevent exceeding the limit fees.

[libertron]

Great post sir: I hope the prohibition against "due date gimmicks" means that they will have to keep the payment due on the same day of the month forever. I hate going online to pay the bill and finding that they changed the date to a week before and there's a $29 late fee.

One part of the bill that may not be good though, is prohibiting them from giving subprime cards to "people who can't afford them". Pretty much everyone needs to have a card, even if it has a low limit, if they want to rent a car or other things or get a hotel room.

[LiberalLo]

Capital One did the very same thing to me last month. The "system" wasn't accepting my user name and password so I could not get my statement online. I called one number 3 times and all it does is give your balance. I finally found another number, which I called and spoke to a supervisor. I explained the situation and after an hour's conversation, she agreed to give me a month's "hardship" , where I didn't have to make a payment in February, as they had posted my February payment to January because they changed the payment date without notifying me, the dirty rat bast****. I thought about that for a while and then decided to go without food for a week and pay them another February payment because I do not trust any credit company for any reason, whatsoever. I am not charging anymore. I am just paying these damn things off and saying, "buhbye". I have a very high credit score and I knew they would just trash it if I didn't make that payment, no matter what they said. To say nothing of my low interest rates.
CREDIT CARD COMPANIES SUCK, REALLY, REALLY SUCK!

[Rocket80]

Since when is it the role of the federal government to regulate the price of products made by private companies?? This bill makes no sense. What's next? No hamburgers over $5? All TV"s must be under $1000?? What an absurd idea.

If you aren't happy with the price of a product (in this case, money) don't buy it. This bill will hurt credit card company profits which in turn hurt everyone else's interest rates! If the CC companies can't charge high fees to customers with bad credit, they are just going to shift the burden of that lost profit to the good customers by raising their rates. This is so obvious and is a foolish bill to support..