Credit cards

Wall Street Accountability and Consumer Protection Act

hmoroz — Thu, 17 Dec 2009 11:24:17 -0500

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Percentage of delinquent loans originated by IndyMac, which failed in the summer of 2008, that required either very little or no documentation: 81.9

Estimated total support made available by the federal government to the financial system since 2007: $23.7 trillion

Year in which Goldman Sachs paid its highest bonuses ever: 2007

Year in which Goldman Sachs is expected to break this record: 2009

Total federal TARP funds used to bail out Goldman Sachs Group: $10 billion

Number of homes the Center for Responsible Lending estimates could be saved by court-supervised modifications of mortgages in bankruptcy: 800,000

Overview/Summary

Middle Class Position Analysis

Middle Class Supports. The economic and financial crisis has demonstrated that the current financial regulatory system permits banks, mortgage brokers and servicers, and other firms to enrich themselves at the expense of ordinary Americans. Abusive and fraudulent mortgages sold to unsuspecting homeowners fueled the housing crisis while credit card companies used deceptive billing practices to mire cardholders in debt. The federal government leaped into action to assist the financial services industry when firms like AIG, Morgan Stanley, and Citigroup were at risk. The $700 billion TARP program and trillions of dollars more in cheap loans and guarantees have nurtured the financial services sector back to health, profits, and gigantic compensation packages. Meanwhile, middle-class Americans continue to face foreclosure and abusive lending and credit card practices in addition to extended bouts of unemployment.

The Wall Street Reform and Consumer Protection Act’s creation of a Consumer Financial Protection Agency is a critical innovation to protect ordinary Americans from deceptive and abusive lending practices. While consumers are currently guarded from faulty products like toasters, no single agency is tasked with overseeing the financial products and services – from credit cards to mortgages and student loans – that Americans rely on every day to earn a middle-class standard of living. The CFPA will be empowered to root out products and services that are harmful to aspiring middle-class and middle-class Americans. It will promote equal access to safe credit products and root out harmful ones like certain subprime mortgages, abusive credit card practices, and usurious payday loans. The Agency is critical to making the financial services sector work for ordinary Americans. The Mortgage Reform and Anti-Predatory Lending Act, which is included in the bill, also takes important steps to combat and end the abusive lending practices at the root of the financial crisis.

The legislation’s increased regulation of executive compensation, improved protections for investors, and expanded oversight of derivatives all address factors – compensation structures that encouraged excessive risk taking, fraudulent investment practices like Bernard Madoff’s Ponzi scheme, and opaque derivatives contracts – that contributed to the financial crisis. These steps will help ensure that similar practices do not precipitate another crisis.

The Financial Services Oversight Council, the regulatory powers granted to the Council, and the dissolution authority included in the legislation make the development of a financial threat into an agent of financial and economic destabilization less likely. By regularizing a process for oversight of financial markets and creating a mechanism for regulators to impose capital, leverage, and other standards on at-risk firms, the legislation significantly enhances the federal government’s capacity to stem an outbreak of instability before it begins. Most importantly for middle-class Americans, this process and the dissolution authority created by the legislation rely on assessments of the largest financial firms for funding. Thus, if future bailouts become necessary, they are much less likely to use taxpayer dollars.

Quotes from Experts

Beyond this Bill

Additional Resources

Americans for Financial Reform

“Financial Regulatory Reform,” from the House Financial Services Committee

“Consumer Financial Protection Agency,” from the Consumer Federation of America

Wall Street Accountability and Consumer Protection Act

hmoroz — Thu, 17 Dec 2009 11:24:17 -0500

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Percentage of delinquent loans originated by IndyMac, which failed in the summer of 2008, that required either very little or no documentation: 81.9

Estimated total support made available by the federal government to the financial system since 2007: $23.7 trillion

Year in which Goldman Sachs paid its highest bonuses ever: 2007

Year in which Goldman Sachs is expected to break this record: 2009

Total federal TARP funds used to bail out Goldman Sachs Group: $10 billion

Number of homes the Center for Responsible Lending estimates could be saved by court-supervised modifications of mortgages in bankruptcy: 800,000

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

Americans for Financial Reform

“Financial Regulatory Reform,” from the House Financial Services Committee

“Consumer Financial Protection Agency,” from the Consumer Federation of America

Expedited CARD Reform for Consumers Act of 2009

hmoroz — Wed, 04 Nov 2009 18:57:51 -0500

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Effective date of most provisions of the originally introduced version of the Credit Card Accountability, Responsibility, and Disclosure Act: 3 months after passage

Effective date of most provisions of the version of the Credit Card Accountability, Responsibility, and Disclosure Act that was signed into law: 9 months to 15 months after passage

Percentage of credit cards from the 12 largest banks that use practices deemed “unfair or deceptive” by the Federal Reserve: 100

Median advertised range of APRs for credit cards issued in December of 2008: 9.99%-15.99%

Median advertised range of APRs for credit cards issued in July of 2009, after the Credit Card Accountability, Responsibility, and Disclosure Act’s passage: 12.24%-17.99%

Maximum annual fee instituted by Citigroup in August that is imposed when a cardholder does not spend enough: $90

Overview/Summary

Middle Class Position Analysis

Middle Class Supports. The Credit Card Accountability, Responsibility, and Disclosure Act was a major step forward for consumer protections. The legislation ended the most insidious practices employed by credit card companies, protecting consumers from policies that can keep them mired in debt despite their best efforts to dig themselves out. However, the Act delayed implementation of these vital consumer protections for over a year in some cases, allowing card companies to raise interest rates, increase fees, and jack up minimum payments in the meantime. The Pew Safe Credit Cards Project finds that many credit card companies worsened their treatment of consumers in anticipation of the legislation. The Expedited CARD Reform for Consumers Act would ensure that these unfair and deceptive practices end immediately. Although the bill will not aid consumers whose interest rates and fees have been raised in recent months, the Act will prevent card companies from continuing to intensify the financial strain on households already struggling to make ends meet.

Quotes from Experts

Beyond this Bill

Additional Resources

“H.R. 2382, the Credit Card Interchange Fees Act of 2009 and H.R. 3639, the Expedited CARD Reform for Consumers Act,” Hearing of the House Financial Services Committee

“Still Waiting: ‘Unfair or Deceptive’ Credit Card Practices Continue as Americans Wait for New Reforms to Take Effect,” from Pew Safe Credit Cards Project

“Modernizing Consumer Protection in the Financial Regulatory System: Strengthening Credit Card Protections,” from the Senate Committee on Banking, Housing, and Urban Affairs

Expedited CARD Reform for Consumers Act of 2009

hmoroz — Wed, 04 Nov 2009 18:57:51 -0500

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Effective date of most provisions of the originally introduced version of the Credit Card Accountability, Responsibility, and Disclosure Act: 3 months after passage

Effective date of most provisions of the version of the Credit Card Accountability, Responsibility, and Disclosure Act that was signed into law: 9 months to 15 months after passage

Percentage of credit cards from the 12 largest banks that use practices deemed “unfair or deceptive” by the Federal Reserve: 100

Median advertised range of APRs for credit cards issued in December of 2008: 9.99%-15.99%

Median advertised range of APRs for credit cards issued in July of 2009, after the Credit Card Accountability, Responsibility, and Disclosure Act’s passage: 12.24%-17.99%

Maximum annual fee instituted by Citigroup in August that is imposed when a cardholder does not spend enough: $90

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

“H.R. 2382, the Credit Card Interchange Fees Act of 2009 and H.R. 3639, the Expedited CARD Reform for Consumers Act,” Hearing of the House Financial Services Committee

“Still Waiting: ‘Unfair or Deceptive’ Credit Card Practices Continue as Americans Wait for New Reforms to Take Effect,” from Pew Safe Credit Cards Project

“Modernizing Consumer Protection in the Financial Regulatory System: Strengthening Credit Card Protections,” from the Senate Committee on Banking, Housing, and Urban Affairs

Consumer Financial Protection Agency Act of 2009

hmoroz — Tue, 04 Aug 2009 12:05:27 -0400

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

Consumer Financial Protection Agency Act of 2009

hmoroz — Tue, 04 Aug 2009 12:05:27 -0400

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

Credit Card Accountability, Responsibility, and Disclosure Act of 2009

hmoroz — Fri, 15 May 2009 14:31:08 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Total revolving debt – made up mostly by credit card debt – in January of 2003: $756 billion

Total revolving debt in January of 2009: $976 billion

Number of mailed credit card offerings in 1990: 1.1 billion

Number of mailed credit card offerings in 2005: 6.06 billion

Number of mailed credit card offerings in 2008: 3.8 billion

Minimum percentage increase in the average late fee between 1995 and 2005, adjusted for inflation: 80

Amount of fees charged to credit card customers in 2002: $10.7 billion

Amount of fees charged to credit card customers in 2007: $33 billion

Overview/Summary

Middle Class Position Analysis

Middle Class Supports. Many middle-class Americans rely on credit cards to meet daily expenses. Revolving debt – which mostly stems from credit cards – has increased 66% since 2000 . 80% of U.S. households have at least one credit card and more than 55% of households carried an outstanding balance in 2004. Since credit is increasingly necessary to fund a middle-class standard of living, credit card companies have been able to take advantage of their customers. As credit has become scarcer and card companies more concerned about maintaining their bottom line during the financial crisis, card companies have hiked interest rates even on cardholders with excellent credit.

Consumers have been slapped with excessive and obscure fees and interest charges that, if they are explained at all, are described in small text and confusing language. It is now common practice for credit card companies to apply finance charges twice in a billing cycle (double-cycle billing); to raise interest rates on a credit card for credit problems not associated with that card (universal default); to charge multiple over-the-limit fees; and to apply payments on balances with multiple interest rates to the balance with the lowest rate, all practices banned or restricted under this bill. The Credit Cardholders’ Bill of Right ends the most insidious practices employed by credit card companies, protecting consumers from policies that can keep them mired in credit card debt despite their best efforts to dig themselves out.

Quotes from Experts

Beyond this Bill

Additional Resources

“Modernizing Consumer Protection in the Financial Regulatory System: Strengthening Credit Card Protections,” from the Senate Committee on Banking, Housing, and Urban Affairs

“Reining In Credit Card Abuses,” from U.S. Public Interest Research Group

“The Credit Cardholders’ Bill of Rights,” by Adam Levitin of CreditSlips

Credit Card Accountability, Responsibility, and Disclosure Act of 2009

hmoroz — Fri, 15 May 2009 14:31:08 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Total revolving debt – made up mostly by credit card debt – in January of 2003: $756 billion

Total revolving debt in January of 2009: $976 billion

Number of mailed credit card offerings in 1990: 1.1 billion

Number of mailed credit card offerings in 2005: 6.06 billion

Number of mailed credit card offerings in 2008: 3.8 billion

Minimum percentage increase in the average late fee between 1995 and 2005, adjusted for inflation: 80

Amount of fees charged to credit card customers in 2002: $10.7 billion

Amount of fees charged to credit card customers in 2007: $33 billion

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

“Modernizing Consumer Protection in the Financial Regulatory System: Strengthening Credit Card Protections,” from the Senate Committee on Banking, Housing, and Urban Affairs

“Reining In Credit Card Abuses,” from U.S. Public Interest Research Group

“The Credit Cardholders’ Bill of Rights,” by Adam Levitin of CreditSlips

Credit Cardholders’ Bill of Rights Act of 2009

hmoroz — Wed, 01 Apr 2009 17:08:41 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Total revolving debt – made up mostly by credit card debt – in January of 2003: $756 billion

Total revolving debt in January of 2009: $976 billion

Number of mailed credit card offerings in 1990: 1.1 billion

Number of mailed credit card offerings in 2005: 6.06 billion

Number of mailed credit card offerings in 2008: 3.8 billion

Minimum percentage increase in the average late fee between 1995 and 2005, adjusted for inflation: 80

Amount of fees charged to credit card customers in 2002: $10.7 billion

Amount of fees charged to credit card customers in 2007: $33 billion

Overview/Summary

Middle Class Position Analysis

Middle Class Supports. Many middle-class Americans rely on credit cards to meet daily expenses. Revolving debt – which mostly stems from credit cards – has increased 66% since 2000. 80% of U.S. households have at least one credit card and more than 55% of households carried an outstanding balance in 2004. At the same time, middle-class households are constantly bombarded with misleading credit card offers even when they cannot afford to take on additional debt. But since credit is increasingly necessary to fund a middle-class standard of living, credit card companies have been able to take advantage of their customers. As credit has become scarcer and card companies more concerned about maintaining their bottom line during the financial crisis, card companies have hiked interest rates even on cardholders with excellent credit.

Consumers have been slapped with excessive and obscure fees and interest charges that, if they are explained at all, are described in small text and confusing language. It is now common practice for credit card companies to apply finance charges twice in a billing cycle (double-cycle billing); to raise interest rates on a credit card for credit problems not associated with that card (universal default); to charge multiple over-the-limit fees; and to apply payments on balances with multiple interest rates to the balance with the lowest rate, all practices banned or restricted under this bill. The Credit Cardholders’ Bill of Right ends the most insidious practices employed by credit card companies, protecting consumers from practices that can keep them mired in credit card debt despite their best efforts to dig themselves out.

Quotes from Experts

Beyond this Bill

Additional Resources

“Hearing to Reignite Debate on Credit Cardholders’ Bill of Rights & Consumer Overdraft Protection,” from the House Financial Services Committee

“Reining In Credit Card Abuses,” from U.S. Public Interest Research Group

“The Credit Cardholders’ Bill of Rights,” by Adam Levitin of CreditSlips

Credit Cardholders’ Bill of Rights Act of 2009

hmoroz — Wed, 01 Apr 2009 17:08:41 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Total revolving debt – made up mostly by credit card debt – in January of 2003: $756 billion

Total revolving debt in January of 2009: $976 billion

Number of mailed credit card offerings in 1990: 1.1 billion

Number of mailed credit card offerings in 2005: 6.06 billion

Number of mailed credit card offerings in 2008: 3.8 billion

Minimum percentage increase in the average late fee between 1995 and 2005, adjusted for inflation: 80

Amount of fees charged to credit card customers in 2002: $10.7 billion

Amount of fees charged to credit card customers in 2007: $33 billion

Overview/Summary

Middle Class Position Analysis

Middle Class Supports. Many middle-class Americans rely on credit cards to meet daily expenses. Revolving debt – which mostly stems from credit cards – has increased 66% since 2000. 80% of U.S. households have at least one credit card and more than 55% of households carried an outstanding balance in 2004. At the same time, middle-class households are constantly bombarded with misleading credit card offers even when they cannot afford to take on additional debt. But since credit is increasingly necessary to fund a middle-class standard of living, credit card companies have been able to take advantage of their customers. As credit has become scarcer and card companies more concerned about maintaining their bottom line during the financial crisis, card companies have hiked interest rates even on cardholders with excellent credit.

Consumers have been slapped with excessive and obscure fees and interest charges that, if they are explained at all, are described in small text and confusing language. It is now common practice for credit card companies to apply finance charges twice in a billing cycle (double-cycle billing); to raise interest rates on a credit card for credit problems not associated with that card (universal default); to charge multiple over-the-limit fees; and to apply payments on balances with multiple interest rates to the balance with the lowest rate, all practices banned or restricted under this bill. The Credit Cardholders’ Bill of Right ends the most insidious practices employed by credit card companies, protecting consumers from practices that can keep them mired in credit card debt despite their best efforts to dig themselves out.

Quotes from Experts

Beyond this Bill

Additional Resources

“Hearing to Reignite Debate on Credit Cardholders’ Bill of Rights & Consumer Overdraft Protection,” from the House Financial Services Committee

“Reining In Credit Card Abuses,” from U.S. Public Interest Research Group

“The Credit Cardholders’ Bill of Rights,” by Adam Levitin of CreditSlips

Credit cards

Wall Street Accountability and Consumer Protection Act

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

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Beyond this Bill

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Additional Resources

Wall Street Accountability and Consumer Protection Act

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

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Quotes from Experts

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Additional Resources

Expedited CARD Reform for Consumers Act of 2009

Legislation

The middle class

Video Summary

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Middle Class Position Analysis

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The middle class

Video Summary

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Overview/Summary

Middle Class Position Analysis

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Beyond this Bill

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The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

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Beyond this Bill

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The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

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Quotes from Experts

Related Blog: Text

Beyond this Bill

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Additional Resources

Credit Card Accountability, Responsibility, and Disclosure Act of 2009