![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-871030-100x100.png\")
Basically, they are pissed they can't do whatever they want, whenever they want anymore. BOO FUCKING HOO is right.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-1018412-100x100.png\")
Yep, exactly.
When I worked in the Mortgage Industry, I saw an applicant with a 33% Interest Rate. Revolving/Monthly I remind you. Thats 396% annually/ think about that!
I think the correct name for Credit Card Companies would be JOEYS (motto) We'll break your fucking legs if you don't pay.
![\"user-pic\"](\"/css/images/default.gif\")
We might all be glad to see the credit card industry getting what its due. Ultimately we will be the ones having our credit lines slashed, and ultimately having rates increased. Unfortunately the control will still ultimately be with the bankers.
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-78160-100x100.png\")
\"...having our credit lines slashed, and ultimately having rates increased. Unfortunately the control will still ultimately be with the bankers.\"
And this is different from now in just what way ?
All of you people that are wringing your hands about \"lack of access to credit for some people\" need to wake up and read a newspaper (or Consumerist!). These credit card pimps have pulled the rug out from under lots of families just when they needd it. And I am not just talking about slow pay deadbeats,either. Look up the joys of \"balance chasing\" and credit cancellations for no reason at all. I have a very high credit score and just got a notice from Bank o' America that my card rate is going to the moon because...Because they can,thats why. (I've never been late or missed,so its possible that they are trying to chase me away because I am not a profit center for them).
Meanwhile,lots of families are already under the control of their bankers (and if their one sided contract is not control,I'd hate to see something worse). No, the time has come to make the arrangement more of a nomal business relationship than the exploitative one that it has become.
And as pointed out elsewhere above,some people just don't need to have a credit card. hard truth,but truth nonetheless...
@Snarkysnake: You gotta love BofA. I got the same rate increase note. I called them and the rep lied to me on the phone, spinning tales about the \"Times Square Prime Rate\" going up. I'm sure I did not mishear her. I asked her if the Times Square Prime Rate was the rate you got from a guy named Guido in Times Square.
So, they had an option to freeze your interest rate as long as you don't make any new charges so I took that. A couple of weeks later, on a different account that I have with them, but with the same SSN and linked together in their online system, they started offering me a 1.2% 1 year teaser rate. I think they have no clue about what they are doing.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-623704-100x100.png\")
@Snarkysnake: I was going to post that if you hadn't - what is the difference? They're already raising rates and slashing credit limits now, even without the proposed regulations!
If what America needs to have freely flowing credit is for credit card companies to change terms, raise rates, etc., whenever they want to whoever they want no matter if their credit is good or bad...then I don't want it!
I wouldn't be surprised if our lovely (*cough*) Congress falls for this letter. The CC companies have the money and regular citizens don't. Congress will always go for the money. So I'm waiting to see what happens this time.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-394634-100x100.png\")
@Jason Holmes: This will probably be a good thing. There are a lot of people who should not have a credit card, and my hope is that a large number of people will have their credit cards closed. These are people who shouldn't have received a card in the first place. My only concern is that the pendulum will swing too far, but this concern is not enough to suggest that we don't curtail man current credit card practices.
I especially like the \"no overlimits unless the customer opts in.\" This is a no brainer, and should have been available long ago.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-4039-100x100.png\")
@Jason Holmes: True, but credit cards are the worst kind of credit. The average American household has $10k in card debt. America would be way better off with less card credit available.
@Jason Holmes: And credit lines probably should be slashed. But that's a different issue.
This issue is simply fixing the one-sided contractual nature of credit card agreements, where the credit card companies can - and do - dramatically alter the terms of the agreement and apply those terms retroactively.
@Jason Holmes: \"Ultimately we will be the ones having our credit lines slashed, and ultimately having rates increased\" Is that such a bad thing? It's pretty obvious that we can't control our own spending, so if higher rates and lower limits are imposed maybe some people will be forced to live on what they actually earn.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-210047-100x100.png\")
My big concern is for students and new borrowers. They will have almost no access to credit in an environment where default costs cannot be easily transferred to customers. The ABA is right to represent their position and I hope Congress considers it when passing the legislation.
My concern is and has been that these folks cannot be taught good habits, that we're shifting the supply into unsafe hands. Given the choice between the desperate getting abused by credit card companies or unsavory payday, title, and shark lenders I'd rather it be the former. That said, fuck it, I'm sure the new health care system compensates the uninsured for broken kneecaps.
@ADismalScience: \"My concern is and has been that these folks cannot be taught good habits, that we're shifting the supply into unsafe hands.\"
I do not understand why they cannot be taught to pay their bills on time?
@ADismalScience: I typically love your posts, but you've got to stop falling back on this tired, and false, argument that humans are stupid and incapable of learning, growth, and change.
Tell you what.
I want you to watch Suze Orman. Not because she's a genius - just spend five minutes listening to her \"Can I Afford It?\" section. Listen to the flailing, half-baked rationalizations people come up for spending and ask yourself - if these are the ones with the wherewithal to call a professional and ask for help, what the heck can I do about the body politic?
Look around you at what's happened to the economy. Even accepting the abuses of the mortgage industry and credit card industry, people took on enormous debts of their own free will and volition. Not because they thought mortgage companies and banks were magical beings that could see into the future and know how much they could afford or sell the house for, but because people wanted things. Any other explanation is a cock-and-bull bunch of clown makeup to hide the blush of shame.
Not one substantial legal change fomented this - nothing more sophisticated than the simple availability of credit caused it to be wantonly consumed. The only policy relevant to the collapse, affording for the deregulate environment that helped provide WAY too much candy to the children, was Greenspan's neverending interest rate party. I'm not making the argument that humans can't learn, grow, or change, but I will readily make the argument that you cannot build policy on the hope of self-governance. After all, isn't that why deregulation \"failed?\"
The only difference between the deregulated environment of today and the environment of the future is who protects who. It used to be that consumers were asked to make rational choices about their own spending. Well, that didn't work. And I simply don't buy the argument that this was all one big scam, one big lie perpetrated on innocent families with no skin in the game. You can't tell me that these fools had no idea, that it was a shock when they got foreclosed on or received default notices. I've been on the front lines of this nonsense for far too long and heard far too many rationalized lines of bull from far too many supposed victims to feel anything but jaded about it.
At the end of the day, all this legislation is just the government taking the tools out of your hands because we simply can't handle it. Consumers have EVERY necessary bit of information to know that credit cards are bad if you run a balance, that payday lending is bad, that borrowing from tomorrow is bad. Come on! You get bombarded with warnings and advice if you're even remotely curious about your fiscal surroundings. And still we have trillions in revolving debt. You do the math on \"learning and change.\"
I agree with you on nearly everything you've stated here, but I have to add that our basic educational system (note I mean K-12, here) has severely degraded over the last 40-50 years. Now, I'm not about to derail the discussion by diving into a huge discussion on the US educational system here (that's a whole other barrel of monkeys), but the issue of education, by itself, is certainly pertinent to the concept of consumers making terrible decisions in the face of \"having the information right in front of them\".
\"I'm not making the argument that humans can't learn, grow, or change, but I will readily make the argument that you cannot build policy on the hope of self-governance.\" Much better stated, agree 100%.
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-44827-100x100.png\")
@ADismalScience:
You're over simplifiying this, which is hillarious in comparison to the length of your post.
For those who are responsible they will still have available credit. But I am sorry credit shouldn't be offered to those who can't pay it back.
You're acting like credit cards will never be offered if this goes through. These banks are stupid if they think we're falling for their bluff. They need America as much as or more than you think America needs available disposable credit sources.
These tools you say that are being taken away should have been offered to begin with. Offering credit lines to kids away from home for the first time with no job is insane
For those who are responsible they will still have available credit. But I am sorry credit shouldn't be offered to those who can't pay it back.
If you're going to criticize me for oversimplifying, you should understand how the math on \"those who can and can't pay it back\" is actually done. The actual math is \"Will we make money on this?\" If the answer is \"no\" (and in this environment \"maybe not\") the creditworthiness of the borrowers in the market segment is irrelevant.
If you remove the fee gimmicks etc. that make profitability with high risk borrowers possible, you wield a two-edged sword. That's all I'm saying. I agree with the legislation, because America's borrowers need to be babysay. Clearly. But there are consequences, and the ABA's letter makes them clear.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-307161-100x100.png\")
@ADismalScience: Very good points. As a grad student, I've had to rely on credit to buy books and other supplies. I worked year round, but my employers weren't so kind as to give me a lump sum each August. While I doubt the doom and gloom these bankers predict will fully come to pass, there regulations could inadvertantly make like harder on college-age students.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-16563-100x100.png\")
@ADismalScience: Yeah, but the companies could (and still can) go after new borrowers using time-tested techniques like secured cards or low initial limits.
They simply can't commit usury as part of their business model thereof. Less predatory, slower growth, all of which benefits those with virginal credit scores. Not a bad thing.
@ADismalScience:
Bullshit, the lenders won't be able to help themselves.
They love throwing credit lines at college students because they love to ring up exorbanant debt.
The rules might make the easy profit harder, but they'll still make money on little Sammy Student wanting a flat screen.
We'll see. The business model today is tiered, the fees generally high so that the few current students generate enough to cover Sammy Flatscreen's defaults and late payments.
If that becomes harder to sustain, or unsustainable, the liquidity goes away.
Good! They need to stop hounding students with credit offers.
They can already get everything they NEED covered with their student loans. Credit cards only allow for frivalous debt.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-469220-100x100.png\")
@PSN: kingpsyz: Student loans aren't as easy to come by, as my girlfriend is finding out the hard way. She's looking to take a loan out with the Bank of HIV 2 Elway.
Well, see, student loans are harder to come by and many schools/lenders don't offer the ability to take out student loans that don't apply directly to tuition or housing. As a guy who used a credit card for basic necessities in college on the assumption of future income, I worry how it will work out for my analogues in a worsening environment.
@ADismalScience: I don't think the model of \"borrow now on a credit card, pay it off when you start earning an income\" is common.
The more popular model is \"borrow now, then revolve it into perpetuity.\"
@ADismalScience:
This is complete b.s. I work at a university and my girlfriend is a graduate student. I've not seen nor heard of any such difficulties.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-161466-100x100.png\")
Hm, I guess the world has changed over the past decade, but I took out loans for room/tuition and worked to pay for everything else (food, books, clothes, beer, etc). I didn't get my first (secured) credit card until after graduating.
But senators how can we keep taking extravagant vacations, swim in vaults of gold coins, dodge taxes with our bonus systems, and generally fuck the American people if we have to play by the rules?
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-259013-100x100.png\")
Translation: \"By limiting the exorbitant fees we can charge, we can no longer afford to give credit to people who will not pay us back\" Hrmm, this is a tragedy...
I say let them drop our credit limit and up our APR. It'll force us to STOP SPENDING ON CREDIT!!! It will make us better in the long run.
ABA needs to learn that to 'manage risk' is to not extend credit to non-credit-worthy customers, rather than target/prey upon that same class...
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-545239-100x100.png\")
I love how they're basically threatening to not give out credit so freely as they once did.
Oh no. What will I ever do without the daily offers of pre-approved cards cluttering my mailbox?
I don't think it should be as easy as it is to get credit anyhow. So deadbeats can't get credit cards? Why is that bad? What if people hadn't been able to buy homes they couldn't afford, either?
I know that it's not that simple, that some of the 'deadbeats' are simply working poor, but even then, I don't believe credit cards are beneficial, in fact they may be detrimental to someone trying to claw his/her way back.
I guess I'd rather err on the side of prudence when it comes to loaning money. In my mind, the ABA hadn't offered any negatives to this bill at all.
Oh and one other thing: universal default makes loads of sense. It seems punitive, but a failure to pay one bill simply indicates that you chose to pay Peter instead of Paul. Look for that to become a huge factor in credit scores going forward if credit issuers can't assess risk fees. In fact, that's probably a great question for Goolsbee - how does he see changes to these rules affecting credit evaluation moving forward?
@ADismalScience: Using the logic of Universal Default, anyone convicted of shoplifting should have their children forcibly taken away by the State. Because obviously, if someone shoplifts, it's obvious armed robbery is soon to be forthcoming, followed by a Texas-style murder/suicide.
@Trai_Dep: Your analogy is horrible. A better one would be that by his logic someone caught shoplifting at Best Buy should be banned from Wal-Mart as well, because they've proven that they're capable of shoplifting. Guess what? If retailers could tell each other who they catch shoplifting in a way that's accurate and transparent (and gives accused shoplifters a means of clearing their names), I'd be all for it. It would keep prices down for those of us that aren't thieves. Universal default keeps credit prices down for those of us that use our cards responsibly.
As far as I can tell, Dismal never even insinuated that a person who missed one payment is about to miss every payment and go bankrupt, which is what your \"logic\" would say he suggested. It seems to me his argument is that if a person misses one payment to Company A, they are more likely to miss a future payment to Company B than another person who has never missed any payments. That seems like reasonable risk management to me.
@Trai_Dep:
It's not the same logic. Being late on a bill or failing to pay it creates a clear, immediate, and reliable risk of late payment or non payment. That connection is far less measurable/demonstrative in the case of the shoplifting scenario, but then again - if shoplifters show a powerful statistical correlation to domestic abuse etc. it may not be a bad idea for the state to snatch those kids away.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-25946-100x100.png\")
@ADismalScience: Come on, universal default is the mad dash that creditors use to try to get to \"the finish line\" aka bankruptcy first and with the biggest claim on current and future assets.
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-2688-100x100.png\")
@BoogerRed: You may disagree with ADismalScience but he clearly isn't trolling. His points are well thought out and valid. If you don't agree with what he's saying, I encourage you to point our specifically why.
I think Universal Default would be ok if credit cards didn't specifically do things to make you pay late such as changing your due date on a whim. Making a single late payment doesn't make you a bad person and I don't think other companies should be able to penalize you for it.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-371007-100x100.png\")
Yes it will restrict credit to safer bets. This is a good thing. Yes one or two of my credit cards may be canceled. But then since I rarely carry a balance and always pay it off ASAP ... they are going to anyway...
How about we at least end the pure money-grab that is called \"double-cycle billing?\"
@ ADismalScience
Give it up dude - The troll act doesn't work.
@nakedscience: Obviously he does not. In fact, he's posted that same line multiple times-somewhat trollish himself.
Maybe we should email him our thoughts on what we think.
Web page PDF with his contact information.
www.americascommunitybankers.com/NR/rdonlyres/DC65CE12-B1C7-11D4-AB4A.../48134/SFinLetteronBasisReporting062907.pdf
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-470935-100x100.png\")
The reality of the issue is the simple fact that the credit card industry changes the terms in their agreements with their customers to the point that the customers are being abused. \"The fine print\" has really taken its toll on a lot of credit card users over the last year, with many seeing cost of their credit double. Yes, it was their responsibility to read the fine print, and those people gave the banks a blank check to make changes to the account, but until recently, there were few instances of what could be called credit card company abuse of the terms.
The simplest solution is to make credit contracts non-alterable after agreement by both parties with clear terms in plain writing. If a credit card company wants to offer a 28% APR and $500 limit to new borrowers or those with bad credit, make it available. If they offer a 2% APR and no limit to folks with an 830+ FICO, all the better. Just be clear in what you are selling and the service you are offering from the start.
Yes, this legislation will cause change in the industry and existing methods of approving credit will have to change, but it really is for the good of the consumer. This is consumer protection.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-488475-100x100.png\")
Well put. The problem with the criticisms is that people seem to be blaming the consumer for using credit in the first place, and ignore the ones who were using it responsibly before the companies arbitrarily changed the terms.
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-1161-100x100.png\")
Here's a picture of Floyd E. Stoner, Executive Vice President, Congressional Relations & Public Policy, American Bankers Association:
@Ben Popken: Maybe stoner is the right name for him. Dude looks like hes smoked a few blunts in his lifetime
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-368496-100x100.png\")
Let them get slapped, America needs to be a saving country again rather than an Easy Come, Easy Go society. With savings it gives you time to think about your purchases and if they are truly worth it. It also slows down impulse buying and makes you more financial stable.
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-719867-100x100.png\")
@FrugalFreak:
Agreed. I actually had to get a co-signer for my first loan many years ago. Credit cards weren't an option for years. Now, everyone wants without regard to when they pay. Basically, the banks want the high risk consumers but everyone else will pay with higher fees. The crap about reduced credit will be true - many of those people shouldn't be getting credit.
I expect a counter from the credit card lobby like this which is nothing more than an attempt to blackmail the public and legislature into keeping the status quo ie record profits based on price gouging .
BOO HOO is right . Don't cry . The credit card industry will find away to manipulate and abuse the new rules for thier unwiley sense of entitlement to excessive profit .
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-211131-100x100.png\")
Can the legislation get rid of the stupid \"Which Jimmy should I choose\" commercials? I want to smack that kid in the face.
No, I don't have children, as you may have guessed.
I think the student loan reforming also needs to happen so private companies can't have such a heyday, but this is a start.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-435267-100x100.png\")
Poor babies. They aren't fat enough already with jacking up rates on people to 30% if they even think about making a late payment?
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-291036-100x100.png\")
Stoner is high if he thinks that Congress won't enact this bill (pun intended).
Publicity is behind this and potentially seats in the House (during mid-year). Sorry Stoner, your profit margins of evil are gone.
*gasp*, you'll have to actually perform customer service rather than threaten us with our credit score.
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-125641-100x100.png\")
Translation: But we can make more money if we're allowed to cheat our customers! It's much harder to make money without ripping people off. Please can we keep ripping people off? Thanks. PS legalize pot.
I think I knew a Floyd Stoner in CA, maybe in the 70s?
Banks and Ethics?
LOL right! They are more worried about the all mighty dollar than if they can give you access to credit. Maybe its not so important to have access to credit like credit cards when your a student. It gives most students bad habits anyways.
I find the bankers' statement so true. With the new legislation, they won't be able to spread the credit risk to good customers and will have to carry the risk all by themselves. Now they will have to make credit less available to credit risky customers.
Hell, I remember my first credit card while at college had a $300 limit and they cut me off when I was a few days late in payment. At least up to last year, being a college student can easily get you \"pre-approved\" for a multiple $5000 credit line at different banks.
Banks are scum...Bankers are uber scum who make way too much money. If they do not give out credit like they did, then we should not have a bad collapse again. They are the reason why we are here.
The smartest thing Bush ever said \"Wall Street got drunk\".
Bank failures, Ponzi schemes, Bailouts, Executive bonus for incompetency and failure, exploitation, double billing cycles, excess ATM fees, greed. Lying. Using bailout money to pay lobbiest. I'm just totally disgusted with the entire banking system in this country. No ethics, no morals, no accoutability. I think that they see the American consumer as second class citizens and treat us accordingly. Credit scores are also a racket used expoited and impose additional costs to consumers ( there is no set standard, its all subjective). The whole system needs to be restructed starting by protecting the consumer.
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-130682-100x100.png\")
I have faith in banks.
Because even though this legislation will be put into law, I know banks will FIND A WAY to make lots of money off credit cards. Ticketmaster-style \"convenience fees\" on every transaction, the return of the yearly fee for card \"membership,\" and of course the higher interest rates come to mind, but they are much more clever than what I can come up with. Risk-based interest rates based on age, sex and spending patterns (heck, they may do that right now).
I know my faith is not misplaced: banks will not stop supplying the rope for people to hang themselves.
Will it affect credit availability? Sure it will. Will it be the disaster that Mr. Stoner (great name, btw) predicts? No, it won't. Their position (and implied threat) is self-serving. It's in their best interest to paint a gloom and doom picture and hope we buy it.
In essence, they're threatening that if they are not allowed to cheat and exploit customers, they'll take their ball and go home. Which is nonsense. They'll simply move into the areas of the market left to them after the regulations take effect.
The argument, essentially, is that they can't extend credit to the uncreditworthy without making up their costs by exploiting all their customers. That may actually be true. But the long-term solution here is to remove their temptation to make bad loans and stay profitable anyway by screwing the rest of us.
Here's a solution from way back when I was a kid: The uncreditworthy should not get credit. The credit industry didn't run the economy back then, and it shouldn't now, either. Fixing it so that \"deadbeat\" once again means someone who doesn't pay their bills (rather than its current industry meaning of \"someone who pays on time and never incurs fees\") would go a long way toward a new national attitude of fiscal prudence. Then maybe the credit business wouldn't be in charge of so much of our lives any more. I know they hate that idea, but it's the right thing, so take their dire predictions about the dreadful fallout of fairness with a large grain of salt.
This just sounds like another attempt by the banking industry to hold the gov't/its customers hostage by threats. First it was \"you HAVE to us billions of dollars or we'll fail and the world will end\" and now its \"you CAN'T limit our ability to gouge our customers or we'll be forced to cut off everyone\".
The banks (and other industry groups) need to learn the lesson that if you do not effectively self-regulate (i.e. giving money to people that cannot pay it back, sucking consumers into black holes of fees from which there is no chance of emerging, impossible-to-understand fine print, etc.) this is what ends up happening to your industry.
No, this bill is not ideal. I think it contains some provisions that go overboard. But them's the breaks for all those banks that just stuck their heads in the sand and pretended it was all hunky-dory.
SirWired
![\"user-pic\"](\"http://consumerist.com/assets_c/userpics/userpic-316976-100x100.png\")
What a worthless letter. If you read between the lines, it comes across as a weak protest from a group who knows they don't have a leg to stand on, and no one to blame for it than themselves. Had they \"self-regulated\" when they should have, they wouldn't be in this situation.
I'm sure a gaggle of corporate Government Affairs personnel have spent dozens of hours helping to craft and wordsmith the letter, and Stoner is delivering the letter in person to key Senators, with a handshake and slap on the back. Even with all of that, it's just a really lame letter.
Bring Back Lay-Away!
Don
I concur!
I love layaway for a couple of reasons-one reason is that I can avoid using a credit card. The other is that, especially for Christmas, I get to keep the kids' presents out of my all-too-tiny apartment, thus avoiding them finding them and ruining the surprise lol
Dude - American Bankers' Association: \"ABA\" is taken. Don't make us go all Monster Cable on your asses...
![\"user-pic\"](\"/mt-static/support/assets_c/userpics/userpic-255368-100x100.png\")
\"We believe these limits will necessitate reductions in available credit...\"
I believe that they have allowed the consumer to have TOO MUCH credit, which ends up costing customer more in higher APR's, overlimit fees, late fees.
The only problem is, the banks make money by lending money. If they don't lend money, the don't make money (or interest/fees). So their protest rings a little hollow to me. It's kind of like threatening to take their ball and go home, which means they no longer get to play, either.
They act like they have no control over their business decisions. It's just like ... if this happens, we'll be FORCED to screw you over. It's inevitable. We can't stop it.
Translation:
\"ability to manage risk\" - if someone happens to be 2 days late making a payment on another credit card, we have every right to retroactively raise your interest rate despite having a spotless record with us.
\"price fees\" - if you'll pay it, we will charge it. And if you won't pay it, then we'll penalize you for it and make sure that you'll never get above a 600 FICO again.
\"allocate payments\" - why in the world should we let you pay off the higher interest purchases first? That's just CRAZY talk!!
\"and otherwise prudently conduct business\" - is it our fault that your due date just happens to fall on a Sunday or bank holiday EVERY month?
Unless reigned in, these companies will continue with their unfair business practices. Go Credit Card Holders Bill of Rights!
The American public really has absolutely no clue what is going on. I was explaining to my bank manager about banks betting off the books, but she thought I was talking about the consumers knowingly overextending themselves. The rhetoric is so thick that people haven't realized that pretty much all of this is connected and America has been running on a script from a Texas think tank for a long time now, say 10 years. People actually believe there is a difference between political parties in America, when in reality there is almost no difference whatsoever. Business bankers are still the biggest lobby and that allows the Texas script to keep on flowing. Social Security funds are bleeding at a rate that insures the government will not be able to repair the damage. Of course that started with the famous 'trifecta' speech. If you under fund education, the FDA, the FTC, etc. etc. You can get away with anything really. You get everything from baby bottles with toxins infused in them, to a sea of plastic trash, to banks rating customers with a bogus ratings system and the best part for them is nobody will really be held accountable. The playing field is NOT level and greed rules America. Problem is people sit there and defend their political party, because they think their best interest is at heart. It's not. If the banks have their way, you'll be paying for their mistakes forever. Enjoy what it is you vote for, meanwhile the American IS being dismantled...
I remember that in the past, the banking industry would resort to intimidation and blackmail tactics to keep congress from spoiling the good old money making credit card factory. They have done such a good job that no they are faced with the prospect of massive defaults on their credit card accounts. They need to be reigned in, limits on intrest, and firm regulations to keep a viable credit industry going. No more free ride.
I'm going to quote someone who's opinion I respect very much. When I asked him about this issue he came back with the following:
\"Actually, there are good points on both sides. Like airfare and luggage fees, the consumer has been so focused on price that they have been willing to accept the concept of unbundling products and additional fees rather than simply the fair pricing of the services as a whole, be it interest on credit or cost of tickets. Unfortunately, this has opened the door for some providers to utilize confusing and potentially abusive pricing practices. Some specific changes to the rules that allow the worst of these practices are warranted.
On the other hand, credit availability is dependent on the ability to sell credit products where the income covers the expenses and recognizes the relative risk involved. If we expect private, for profit and taxpaying entities to provide the service, the expectation of a reasonable profit also must be part of the equation. For these reasons, the lower end of the credit worthy spectrum will have to pay more, or even a premium, for the privilege. If the expense and risk, not to mention the regulatory burden, of providing a service outweighs the reasonable income potential to the provider of the service, the incentive to even provide the service decreases or disappears.
The same issues are there in any discussion of usury laws. If interest rate caps placed on loans (or credit cards) are too low, the credit source dries up when the cost of the funds to provide the credit (interest paid on CDs and money market accounts, for example) approaches or exceeds the interest rate cap. Credit pricing includes the entire spectrum of interest rates, fees, penalties, etc. Limitations in one area can affect another.
So, while abuses are out there that make some \"bank\" credit card practices seem one step above the payday loan people, the ABA letter has a valid concern with respect to the slippery slope down which too broad of government credit allocation and regulation can take us. The concern with the proposed legislation can be summed up in the old saying: Government needs a rifle, has asked for a shotgun and may well be given a bazooka.
Furthermore, legitimate banks are currently operating under two opposing government directives: 1. Get credit flowing again, and 2. Lower portfolio risk and increase bank capital and reserves. Provisions in House Bill 627 could adversely affect banks ability to move toward either and both recovery goals.
Clearly, there are credit card terms in use that are confusing and unfair, just as there were, and are, mortgage lending practices that contributed to many of the failures. Regulations are needed to curb the true abuses, but they should be focused and appropriate, not knee jerk and disruptive. Regulation needs to pinpoint the problems and the perps, not an entire industry in general. Previous administrations and congresses promoted too little regulation in many areas in favor of \"growth\". Now the financial meltdown has shown the folly of such a singular position, and the resulting bailout funds have put the government more directly into the banking business; however, unless the government plans to replace private enterprise in providing all banking services, restrictive legislation needs to be very specifically drawn and carefully considered. \"
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They make money from lending, to all comers. The interest rates they're allowed to charge is the reason they'll give credit to anyone, because it's a numbers game and they come out ahead this way. Responsible lending, and rejecting people who shouldn't get the credit card is what they don't want.
They want to have as big a market as possible and charge as high interest rates as possible. Their money doesn't come from responsible people who have good credit, can afford to shop around, and pay low rates. They make it from the people who have few options and have to pay the high rates.
Of course they are going to use scare tactics and fight tooth and nail to keep sending out card applications to those who can't afford it. When someone doesn't pay, they sell the debt to a collection agency and write it off as a tax deductible loss.
It's one of those issues that's so clear. What's good for them isn't good for us. And for the people who don't earn good credit, they shouldn't have it, it's for a reason! But these companies want to provide it because the profits off high interest rates is so good for them.
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Assuming this passes, am I wrong in thinking that a fair number of us who are good consumers & may have accounts that we don't use often closed may wake up and find them closed (even if we use them occasionally to keep them open)? Or limits cut? In other words, when they make good on their threats, will it not affect even those of us who \"do the right thing\" with our credit?
Me, I don't carry a balance, so if they shut down a card or two, I don't so much care, but as I look toward buying a house in a few years, the last thing I want is FICO starting to drop now.
Maybe there should be a safeguard for our FICO scores in there for this sort of shenanigans? Or even better...an overhaul and new way of looking at our credit that is better than FICO?
A frog can dream...
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BOO FUCKING HOO
GET BENT FLOYD
@PSN: kingpsyz:
YES.