Tuesday, May 19, 2009, AM | Leave Comment
President Obama is pressing Congress to pass legislation that will restrain influence of the credit card industry’s practices by Memorial Day. The Senate is currently debating two bills aimed at protecting consumers. One is Rep. Carolyn Maloney’s (D., N.Y.) Credit Cardholders Bill of Rights, which passed the House of Representatives in April by a wide margin of 357 to 70. The other is a bill proposed by Senate Banking Committee Chairman Christopher Dodd (D., Conn.).
To be fair, both sides of the coin have to be thought over. One side is Congress must put tighter regulation on the industry but at the same time, they should not be too tight that could cause banks to cut back on lending – with potentially harmful effects on the economy and consumers.
The following is a brief description of what’s on the table before the U.S. Senate that at one point Maloney discussed:
- Controversial industry practices.
When two supposedly opposing sides make a contract, it’s always a compromise from both sides. It seems that that’s not the case with credit card companies. They have always acted unilaterally and have controlled the credit market without an oversight by the government in place. This practice has to go away.
- The Federal Reserve has written and approved new regulations in December 2008. What’s the use of a law.
The Feds regulations would go into effect July 2010, more than a year from now. Maloney thinks Congress has to move up the date. The credit card industry would wrap around their prey a lot tighter before the effective date. The Federal Reserve called these practices unfair, deceptive and anti-competitive [What else is new?]. She thinks “once it becomes a law, you are standing on firmer ground.”
Moral of the story
How much of the law, any law, has been protecting the American consumers during all these years? So far, I get the feeling that the Anacondas of the world were swimming freely in the swamps of the consumers anxiety and miseries. The irony is that nobody gave a damn of what the innocent public has gone through and are still swimming those swamps with potentially more anacondas now than ever before.
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