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Thread: House set to pass credit bill after Senate OK

  1. #1
    Moderator Roody's Avatar
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    Thumbs up House set to pass credit bill after Senate OK

    Swift passage expected and then it goes to President Obama

    WASHINGTON - The credit card companies seem to have few friends on Capitol Hill these days, with even the most business-minded lawmakers siding with consumers in speaking out against steep rate hikes and fees.

    The House was expected to pass, possibly as early as Wednesday, a bill that would enact sweeping new restrictions on the industry, including a requirement that customers penalized by higher interest rates because they missed a payment are given a chance to reclaim their lower rate after six months.

    The Senate passed the bill Tuesday, 90-5.

    "Card issuers raise rates for unclear reasons, use billing methods that consumers do not understand, and assign fees and charges without warning," said Sen. Richard Shelby of Alabama, the top Republican on the Senate Banking Committee.

    President Barack Obama is expected to sign the bill into law. Treasury Secretary Timothy Geithner on Tuesday said the bill would "create a more fair, transparent and simple consumer credit market."

    Of the five senators sympathetic to card lenders, two were from South Dakota, where thousands of jobs depend on the industry. Republican Sen. John Thune estimated the bill would cost as many as 5,000 jobs in his home state.

    Sen. Tim Johnson, also from South Dakota and the only Democrat to oppose the bill, agreed it could be devastating.

    "This is a time when millions of consumers are already facing lower credit limits and higher interest rates on their credit cards because of decreasing credit availability and continued economic instability," he said.

    Also opposing the bill were GOP Sens. Lamar Alexander of Tennessee, Robert Bennett of Utah and Jon Kyl of Arizona.

    But their voices were drowned out by lawmakers who said their offices had received dozens of complaints from voters.

    "We said that big banks can no longer take advantage of hardworking Americans," Senate Majority Leader Harry Reid, D-Nev., said of the Senate vote.

    Senate Banking Committee Chairman Christopher Dodd, D-Dem., on Wednesday brushed aside talk that credit will be more scarce if Congress approves the bill.

    Great day for consumers
    Calling Tuesday's Senate vote "a great day for consumers," Dodd also said people still must handle their money responsibly and pay their bills on time. But he also said the measure was "a long time coming, a long time overdue."

    Dodd said any assertion that credit will be hard to get is absurd, "a little like Chicken Little."

    The Pew Health Group estimates that 82 percent of cards available to consumers include the stipulation that the cardholder's rate can increase to any amount indefinitely if the lender determines the person is too much of a credit risk. Consumer advocates say it is these types of practices that can bury consumers in debt if they make one mistake.

    Under the new bill, a customer would have to be more than 60 days behind on a payment before seeing a rate increase on an existing balance. Even then, the lender would be required to restore the previous, lower rate after six months if the cardholder pays the minimum balance on time.

    Consumers also would have to receive 45 days' notice and an explanation before their interest rate was increased.

    Some of these changes, including the 45-day notice requirement, are already on track to take effect in July 2010 under new rules being imposed by the Federal Reserve. But the legislation would put these changes into law and go further in restricting the types of bank fees and who could get a card.

    For example, the Senate bill requires those under 21 who seek a credit card to prove first that they can repay the money or that a parent or guardian is willing to pay off their debt if they default.
    http://www.msnbc.msn.com/id/30843052/

  2. #2
    Moderator YeOldeStonecat's Avatar
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    A good thing I guess, to help those who don't do their homework first and go crazy and sign up with any credit card offer they get in the mail.

    Similar to mortgages.....simply take a few seconds and select the good ones, and you won't get in trouble. Stick with local banks, credit unions if you can.
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    Moderator Roody's Avatar
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    Quote Originally Posted by YeOldeStonecat View Post
    A good thing I guess, to help those who don't do their homework first and go crazy and sign up with any credit card offer they get in the mail.
    That's certainly one way to look at it. Of course the bill largely addresses the abuse CC companies put on consumers for being as much as 1 day late. Things happen and a person getting nailed with more debt because of 1 mistake is corrupt imo.

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    Ohh Hell yeah.. Sava700's Avatar
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    Its only helping those that neglect the rules they agreed upon when they got the card.. like being late. It does NOTHING to reward those that pay on time, keep very low balances or use them regularly.

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    SG Enthusiast Rainbow's Avatar
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    Quote Originally Posted by Sava700 View Post
    Its only helping those that neglect the rules they agreed upon when they got the card.. like being late. It does NOTHING to reward those that pay on time, keep very low balances or use them regularly.
    Im confused why do you reply when you have no idea?
    I always pay my CC bills on time and make 6 figures but I still get lowered limits and they keep trying to raise my rates. Why? And when you call and ask for a lower rate and finally get thru to someone I get Oh no we don't do that.

  6. #6
    Ohh Hell yeah.. Sava700's Avatar
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    Quote Originally Posted by Rainbow View Post
    Im confused why do you reply when you have no idea?
    I always pay my CC bills on time and make 6 figures but I still get lowered limits and they keep trying to raise my rates. Why? And when you call and ask for a lower rate and finally get thru to someone I get Oh no we don't do that.
    I do have a really good idea.. I've talked to several people I know and seen their bills that always pay on time and yet their rates were jacked way high! Its not going to help those that play by the rules its only helping those that try to screw the system or can't play by the rules and shouldn't have gotten the cards to begin with.

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    Moderator Roody's Avatar
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    I agree with Rainbow. You really don't seem to have an idea. It doesn't only help those who miss payments Sava. It also will help you or I from having our interest rates raised on past purchases. That crap can and does happen right now. Shoot it happened to me a few months ago. I was given the option to either close my account or have an interest rate hike on past and future purchases. Now future purchases are one thing, but changing rates on past purchases is bogus.

  8. #8
    Ohh Hell yeah.. Sava700's Avatar
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    Quote Originally Posted by Roody View Post
    I agree with Rainbow. You really don't seem to have an idea.
    again... I have a good idea whats going on and if it does help those that are honest and go by the rules I'll be surprised but for now I don't see it...just like the Mortgage stuff people new damn well what they were getting into when they agreed to a changing interest rate or high payments..

    I hope for your sake it does help everyone but yes I have a VERY good idea of the whole thing.

  9. #9
    Moderator Roody's Avatar
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    Quote Originally Posted by Sava700 View Post
    again... I have a good idea whats going on and if it does help those that are honest and go by the rules I'll be surprised but for now I don't see it...just like the Mortgage stuff people new damn well what they were getting into when they agreed to a changing interest rate or high payments..

    I hope for your sake it does help everyone but yes I have a VERY good idea of the whole thing.
    Clearly you do not Sava because the bill as it is written will in fact help those who are honest and play by the rules as my previous example showed. Under the new bill companies can't raise rates on past purchases. They could before so yes it's a good thing.

  10. #10
    Ohh Hell yeah.. Sava700's Avatar
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    Quote Originally Posted by Roody View Post
    Clearly you do not Sava because the bill as it is written will in fact help those who are honest and play by the rules as my previous example showed. Under the new bill companies can't raise rates on past purchases. They could before so yes it's a good thing.
    Clearly I do... but I hope for the best and watch for the worse.

  11. #11
    Moderator Roody's Avatar
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    Quote Originally Posted by Sava700 View Post
    Clearly I do... but I hope for the best and watch for the worse.
    It's not clear at all. You question how much good it can do, but obviously preventing CC companies from raising rates on past purchases is a good thing. You wouldn't question the good it could do if you knew all that it was about.

  12. #12
    Ohh Hell yeah.. Sava700's Avatar
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    Quote Originally Posted by Roody View Post
    It's not clear at all. You question how much good it can do, but obviously preventing CC companies from raising rates on past purchases is a good thing. You wouldn't question the good it could do if you knew all that it was about.
    I guess we shall see but I'm highly optimistic that it will reward those that run by the rules vs those that played the system.

  13. #13
    Moderator YeOldeStonecat's Avatar
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    Quote Originally Posted by Sava700 View Post
    just like the Mortgage stuff people new damn well what they were getting into when they agreed to a changing interest rate or high payments..
    There's nothing wrong with variable rate mortgages...the key is, to shop wisely, and select your mortgage from a good place. I've had a variable rate for a long time, if I try to recall it's history, it's gone up twice, and it's gone down three times. Nothing huge. I'm paying pretty much what I was paying the very first year I got it. Shop wisely, eyeball the details, look at how much it can go up, caps, etc. A lot of mortgage companies did have good deals with variables.

    Just like with credit cards...shop wisely, don't sign up with any old pre-approved credit card offer that came into your mailbox as junkmail. I'm a believe is sticking with credit cards with your own bank, I've used those right from my local credit union since I was in my teens.

    At times, I've missed payments. My % rate is always low, barely above 10%, on a platinum level card. Hell, for the past 2 years with my move and struggle in the housing market, I've had to bleed the crap out of my credit card, it's at a nearly 15K balance. But I won't have problems with it....because it's with a good local reputable bank, not the first odd-ball name one that ended up in my mailbox. Sometimes you gotta do what you gotta do. But a good credit card company will not punish you with crazy stuff just because you missed a payment once in a while.

    That's what's catching people, the ones who sign up with those fly by night ripoff places that spam your snail mailbox like crazy.
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  14. #14
    Moderator Roody's Avatar
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    Quote Originally Posted by Sava700 View Post
    I guess we shall see but I'm highly optimistic that it will reward those that run by the rules vs those that played the system.
    There is little question someone who doesn't exercise common sense with their credit will benefit from this. That said it still remains a good thing. The reason being is it prevents abuses on past purchases and also it's about time for CC companies to be held to tighter standards. They have abused the system every bit as much as any consumer has.

  15. #15
    Maneater JawZ's Avatar
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    It's a good start towards transparency but I think the credit reporting/scoring system needs alot of work still.

    People who pay on time or pay off their balances do NOT make banks money. It's a debt system.

    I would love to see more consumer education and empowerment that would prevent people from ever having to resort to credit. We need to learn to live within our means.

    ...formerly the omnipotent UOD

  16. #16
    Senior Member tao_jones's Avatar
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    For example, the Senate bill requires those under 21 who seek a credit card to prove first that they can repay the money or that a parent or guardian is willing to pay off their debt if they default.
    I like this part of it. At the college I went to whenever the new semester started there was a plague of credit card companies there trying to get students to apply for their credit cards. I wonder how many of those people they got to sign up turned around and ruined their credit.

    At least with the parents signing on to there is another layer there to protect the kids.

    Stupidity is also a gift of God, but one mustn't misuse it. - JP II

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    Senior Member tao_jones's Avatar
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    Quote Originally Posted by JawZ View Post
    I would love to see more consumer education and empowerment that would prevent people from ever having to resort to credit. We need to learn to live within our means.
    Hell yeah!

    Stupidity is also a gift of God, but one mustn't misuse it. - JP II

  18. #18
    Moderator Roody's Avatar
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    Quote Originally Posted by tao_jones View Post
    I like this part of it. At the college I went to whenever the new semester started there was a plague of credit card companies there trying to get students to apply for their credit cards. I wonder how many of those people they got to sign up turned around and ruined their credit.
    That was a big part of this legislation. It's practically criminal to see the amount of offers sent by CC companies to college students.

  19. #19
    Maneater JawZ's Avatar
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    Quote Originally Posted by tao_jones View Post
    I like this part of it. At the college I went to whenever the new semester started there was a plague of credit card companies there trying to get students to apply for their credit cards. I wonder how many of those people they got to sign up turned around and ruined their credit.

    At least with the parents signing on to there is another layer there to protect the kids.

    the idea was to make them dependent upon credit

    ...formerly the omnipotent UOD

  20. #20
    Moderator Roody's Avatar
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    Quote Originally Posted by JawZ View Post

    I would love to see more consumer education and empowerment that would prevent people from ever having to resort to credit. We need to learn to live within our means.
    That would be a great thing, but I don't see there ever being a world where credit isn't a big part of it.

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