Federal Reserve Finally Does What Congress Won’t Do
May 6th, 2008 | by Tom Harper |Thank God for our system of checks and balances. For the past seven years, Congress has been having an ongoing orgy with the banking industry. And now, finally, the Federal Reserve is about to step in and do Congress’ job for them. Somebody has to do it.
The “legislative” process has pretty much deteriorated into a giant whorehouse on Capitol Hill, with our Congressional prostitutes “representatives” spreading their legs for the industries they’re supposedly “regulating.”
The Federal Reserve, the National Credit Union Administration and the Office of Thrift Supervision are working cooperatively to do what our bought and paid for “elected” government won’t do.
This will be the most far-reaching crackdown on the credit industry in several decades. They’ll be putting limits on some of the credit card industry’s favorite sleaze tactics that we’re all too familiar with:
Two-cycle billing, where there’s an interest charge even during a month when you aren’t carrying a balance.
Deceptive advertising — that bold 68-font headline screams “0% interest!” and the .01 font sentence on page 73 says “interest rate may go up to 999% after three months.”
Retroactively raising the interest rate on existing balances. (Under the new proposal, banks could still raise rates retroactively if the cardholder is at least 30 days late with a payment.)
This new law will also prohibit credit card companies from raising a customer’s interest rate for reasons unrelated to the account. A late payment on a different credit card, or even making a large purchase on another credit card that’s within the credit limit — these have all been popular (and legal!) excuses for jacking up a customer’s interest rates. No more.
Like any wealthy john whose expensive orgy was suddenly interrupted, the banking industry is indignant. The American Bankers Association has ordered their mascot, Ken Clayton, to tell reporters: “This is a very aggressive regulatory intervention in the marketplace that will lead to higher prices and less credit options for everyday consumers.”
The banking industry is concerned about everyday consumers — how touching.
7 Responses to “Federal Reserve Finally Does What Congress Won’t Do”
By Jersey McJones on May 6, 2008 | Reply
Man, Tom, that was well said.
Unfortunately, these are rules enforced by laws but not really laws themselves, They are open to governmental scrutiny and action.
Let’s continue to watch Barney Frank and the election. If the Dems win in November, Frank could be the key to successful monetary reform. It’s a shame Frank is such a pariah to the Right. Ironically, in a couple of ways, he’s about the most bipartisan of all the chairmen.
JMJ
By Dusty on May 6, 2008 | Reply
Look, they will still fuck with folks..they will just have to find creative ways to do it.
I had two credit card co’s raise my interest rate 4 percent saying my credit report had “changed”. I don’t know if it did or not..I wasn’t late on any thing or missed any payments..but I was making the minimum payments since I am on workers comp and get whopping 600 bucks a month.
I never missed a payment and I was never late with a payment to them or aanyone else.
So, when they refused to lower the rate back, or discuss it with me..I quit paying them. So I know my credit rating has changed now…fuckers. 4 fucking percent is ALOT. Plus it raised my minimum payment by doubling it.
By manapp99 on May 6, 2008 | Reply
They cannot fuck with you if you don’t let them. There are many credit card companies to chose from. If you don’t like the treatment at one, change companies. You can even transfer balances. If you are going to be really smart about it take the low interest rate teaser offers, keep it until the interest rates go up and change again.
This is not like a government run health care system where you cannot change if your dissatisfied. The best way to beat the credit card companies is to beat them at their own game. As long as there is open competition the consumer is the boss.
By Chris Radulich on May 6, 2008 | Reply
and what real competition is there in health care now. Especially for those who can not afford it. Our present arrangement makes money for the companies by denying benefits.
By Jersey McJones on May 6, 2008 | Reply
Manapp, if that were true, we wouldn’t have a major credit crisis right now. It’s time to regulate the credit card industry. Arbitrary rate hikes, rolling interest, charging for payments, misapplying payments, disclosure, common contract languauge - it goes on and on, and it’s industry wide. Credit is vital to our national economic health. If we allow it to destroy itself and it’s customers, our very monetary system is at risk. We should at least have some reasonable rules and regs.
JMJ
By Dusty on May 7, 2008 | Reply
Manapp..it isn’t that easy..please, I am not stupid. They already gave me a negative rating before they fucking raised my interest rate and min payment. No one will touch me now.
By Mell on May 8, 2008 | Reply
I agree - I wish this was an issue where free markets would correct the problems but it is clear that the credit card industry has gotten far out of hand and is in serious need of regulation. I’m the last person to say government regulation is a good idea, but clearly the unfair and sneaky practices that the credit card companies are using have to have more transparency. There is zero accountability in the current system.
I’ve dealt with interchange fees with the MPC before and its very apparent to me that this system will never fix itself and that something needs to be done about these often hidden and unfair fees and practices.