No not really! Obama's proposed credit card crack down does not go far enough. It certainly is a first step for a beautiful Saturday morning in May, but his team has got to get much tougher on the financial institutions.
The reality is that we are in the midst of an unprecedented bailout for these very same financial institutions. Billions are being allocated to stabilize the banks, while consumers continue to be walloped by increasing interest rates for an existing and new debt -- when it can be found. Credit card interest rate are ballooning to 30% interest. So a lucky consumer can refinance their mortgage for 5% interest or even less, but carry credit card debt for 30% interest. This does not make sense. These lucky ones can live in their home, but struggle to pay their credit card bills.
Is the American public being punished for the mortgage bailout by these financial institutions? Interest rates have been indiscriminately raised for consumers over the last year, often even for good clients with little notice or purpose.
The Obama Administration must develop sweeping policies and regulations to mandate change within our financial institutions. The legislation proposed, known as the Credit Card Holders' Bill of Rights does not even go into effect, if passed in the Senate, for another 12 months except for notification of interest rate increases. Understandably, the banking lobby is up in arms, and we know we must not let our elected officials in the House and Senate, crumble under these attacks.
Again, we are poised at another crossroads. Do we allow many more Americans to be pushed over the edge into unfathomable financial crisis? In many cases the use of credit cards is not a matter of living beyond a person's means; rather it is a necessity while salaries have been slashed or jobs lost.
If we can mandate the kind of programs to restructure mortgage debt, we certainly must do better than this.