An End to the Credit Card Madness
Last Monday, Senator Christopher Dodd (D-CT) proposed the immediate freezing of interest rates on existing balances for the estimated 700 million credit cards in circulation. Since the passage of the Credit CARD Act of 2009, which outlaws several common abusive lending practices -- particularly the retroactive raising of interest rates and the levying of excessive fees and penalties -- credit card companies have been jacking up interest rates in anticipation of February 22, 2010, when the law goes into full effect.
While key sections of the legislation are already in place, the portion that calls for the termination of deceptive practices will not become active until next year, purportedly so the credit card industry would have ample time to implement proposed regulatory reforms.
However, rather than using this time to diminish their deceptive practices, credit card companies are doing the exact opposite. According to a recent Pew report, "Still Waiting: Unfair or Deceptive," after an examination of nearly 400 credit cards, including all consumer credit cards offered online by the largest 12 bank issuers in America, they found that not only has the credit card industry continued their "unfair or deceptive" practices, they actually have done more to continue cashing in on these practices. All 12 banks examined in the survey, which control more than 90 percent of outstanding credit card debt nationwide would not meet the requirements of the Credit CARD Act of 2009 if it were to be effective today as many continue to raise interest rates on outstanding balances by unilaterally changing account agreements.
Another study conducted by Demos, "The Plastic Safety Net: How Households Are Coping in a Fragile Economy," found that one in four households reported paying a 20 percent interest rate or higher on their card with the highest balance. Nearly one-half of all the households surveyed reported they had been late on a payment and charged a fee as a result -- on average, four times in the last year.
Due to the continued predatory nature of the industry's business practices, recent action by the House Financial Services Committee to move up the effective date of the legislation from February 2010 to December 2009 is welcome news. Senate Banking Committee Chairman Sen. Chris Dodd's proposal to immediately terminate increased interest rates should be a clarion call to members of the Congress that the credit card madness needs to end sooner rather than later.
While Dodd's proposed measure may seem extreme to companies profiting from rates hikes, American families, now more than ever, need government to get tough, before these abusive methods bring anymore families to the brink of financial ruin.
Robert Reich: Breaking Up the Big Banks, and Why Congress Won't Do It
Two ideas are floating around Washington regarding how to handle 'too big to fail' banks, but only one is supported by the Treasury and the White House. Unfortunately, it's the wrong one.
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Let's not forget the fees charged to merchants by credit card issuers.
The average interchange fee in the U.S. is seven times the interchange fee set by Visa and MasterCard in countries throughout the rest of the world. Using 2008 figures, if the interchange fee charged by credit card issuers was decreased (via comprehensive credit card reform legislation) from the current 2.10% to 0.60%, the result would be an annual savings of approximately $34.3 billion for U.S. merchants and consumers.
Let's be clear. The interchange fee is a hidden tax, just not a tax subject to political control or for which there is any discernible social benefit.
The following article discusses the need for comprehensive, standardized, simplified, and transparent credit card reform legislation.
http://www.csnews.com/csnews/images/pdf/creditcardreform.pdf
Usury and immoral - and of course supported by our politicians. I am so sick of DC.
The only way out of this game in which we are always the losers is to change to a resource based economy.
"A Resource-Based Economy is a system in which all goods and services are available without the use of money, credits, barter or any other system of debt or servitude. All resources become the common heritage of all of the inhabitants, not just a select few. The premise upon which this system is based is that the Earth is abundant with plentiful resource; our practice of rationing resources through monetary methods is irrelevant and counter productive to our survival." Jacques Fresco of The Venus Project.
It also gives us control of our lives instead of this slavery that we now have to government and the powers that be in the financial world. Watch this video to see just how far out of our control we are http://www.videosift.com/video/US-GOVERMENT-There-are-38-Levels-above-TOP-SECRET?style=dark
Truly
Congress should revoke the act reforming the Bankruptcy Act. Make Chapter 7 easy again. Then those pesky credit card balances can just go away...
The Credit Card Act of 2009 is just another one of the sham laws put forth by Democrats since the Obama election.
Like so much of the legislation that Obama takes proud credit as being part of his "change," it is an illusion.
Chevron, with all its profits, just raised my credit card interest to 27%.
Looks like I'll be buying Arco from now on.
Why do they always have to go aback and fix what they were too cowardly to do right in the first place. They TOLD the banksters to charge "whatever they deemed appropriate. Now they act surprised that nothing has changed and the Banks and Wall Street are getting ready to shaft US again!
No caps; a crappy "public option" the banks back to their old tricks...all with the sheep's money. Now they want to cut Social Security after everyone has lost their retirement savings and pensions to these mobsters.
It's enough to make a person tear out her hair!
How exactly will many Americans be helped by this? Does Chris Dodd think that freezing interest rates at 29.99% is helpful to Americans? Should we say thank you?
Sadly,.. this is exactly why the Congress made the full effect of the new legislation not take effect until February - so that their "Sugar Daddy" financial interests could attempt to scr#w the taxpayers a bit harder & longer.
Congress is generally bought & paid for by these guys. Its obvious to just about anybody with a lick of sense and any debt at all and has been for quite some time.
The financial corporations have exactly the Government they paid for.
Bribes! That's all it is. Our government form the lowest to the highest has taken bribes. Actually this is the government WE'VE paid for...until they gave all our $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ away to the 10th generation.
Now we don't even have the power ( money IS power) to fight these crooks with campaign donations.
Kassandra, hang on to your hair and realize the power we do have. The power of the pen but most importantly, the mighty vote. The United States does have a voting system and even though things are dismal now and you feel helpless, you can turn all that crap around the next election and I can guarantee that you won't be alone. Take back the country is bigger than change you can believe in and it's unfortunate that our elected officials still can't get their heads out of the sand to see that in less than 3 years from now they will fully and completely understand the meaning of unemployment. The people we have newly elected won't give them a second thought because they'll be too busy putting this country back together.
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