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    • Week-end Wrap – Political Economy – September 27, 2020
      by Tony Wikrent Slouching toward denouement Capitulation Will Not Halt Trump’s Coup David Sirota, September 24, 2020 An important review of political events last week. Yoy may not agree with Sirota’s interpretation, but his analyses has proven correct repeatedly. Remember that Sirota accurately outlined the future course of American politics in his 2008 book […]
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What’s Missing from the Credit Card “Reform” Bill

If these men had known Obama was coming, they would have laughed even harder

If they had known Obama was coming, they would have laughed even harder

Today President Obama signed the so-called “credit card reform bill” into law along with his usual prissy lecture about how Americans have to learn how to behave themselves.

“We’re not going to give people a free pass, and we expect consumers to live within their means and pay what they owe, but we also expect financial institutions to act with the same sense of responsibility that the American people aspire to in their own lives,” Obama said at a signing ceremony in the Rose Garden.

I think he had his fingers crossed behind his back when he mumbled the part about financial institutions behaving responsibly. Anyway here’s what the bill is supposed to do (if banksters were nice, supportive people who wouldn’t take advantage of every possible loophole).

stop arbitrary interest rate increases and “universal default” on existing balances. In universal default, a lender can change a cardholder’s account to costly “default” terms from normal terms when the lender learns the cardholder missed a payment on an account with another lender, even if the cardholder has not defaulted with the first lender

stop card issuers from raising rates for a cardholder in the first year after an account is opened, and require that promotional rates must last at least six months

stop issuers from charging fees for spending beyond their limits, unless the cardholder chooses to allow the issuer to process the excess spending, and restrict any “over-limit” fees

require penalty fees to be reasonable and proportional to the cardholder’s omission or violation

require that cardholders be told how long it would take, and the interest cost involved, in paying off a card balance if they make only the minimum monthly payments

require that cardholders must get 45 days’ notice of interest rate, fee and finance charge increases

Except…if you are more than a month behind on your bill, all bets are off, and your rates can go sky high.

What’s missing from this bill (and what makes it pretty much a toothless sham) is limits on credit card interest rates. There is still no limit on the amount of interest a company can charge you. Usury is still legal. Bernie Sanders tried to save the day, but no dice. The banksters win again.

Before the Senate voted Tuesday, it considered several amendments, not all of which pertained to credit cards. An amendment by Sen. Bernie Sanders, I-Vt., that would have capped credit card interest rates at 15 percent failed.

So there is still no limit on how high interest rates can go. Right now, if you make a late payment, your rates can be jacked up to 40%! If that isn’t criminal, I don’t know what is. With the new law, the companies will have to give you 45 days’ warning before they raise your interest rate sky high.

The other important catch is that banks have plenty of time to raise your rates as much as they want before the bill goes into effect. And banks are already threatening to start charging fees and limit credit.

Critics say help for Americans battling back abusive credit card practices may arrive too late. The Senate bill would take effect in nine months, enabling credit card issuers to jack up interest rates and fees for millions of cardholders ahead of the new regulations.

In fact, an estimated 10 million people holding cards from the eight largest issuers have already seen interest rate hikes of as much as 10 percentage points, according to the Center for Responsible Lending. The issuers—Citigroup, Bank of America, Capital One, HSBC, Discover, American Express, JPMorgan Chase and Wells Fargo—sent out rate increase notices after the Federal Reserve Board in December approved new rules restricting how credit card companies do business. Those rules become effective July 1, 2010.

Predictably, the whiny banksters are having tantrums over this bill, which really isn’t going to help consumers that much anyway. In fact the banksters are saying it will end up costing us all more in the long run.

Banks have repeatedly warned higher interest rates are likely to result because it will be more difficult to set rates based on the risk that customers pose. The higher rates mean less credit available for consumers, they say.

The industry is already experiencing heavy losses from the 90 million households that carry cards. The losses are expected to worsen as the year goes on.

“A lot of consumers have a false sense of security they’re going to get relief,” said Curtis Arnold, founder of CardRatings.com in Little Rock, Arkansas. “The average rate now is 13.8 percent, and I could see it going north of 15 percent by early next year.”

Issuers can try to make up lost revenue from customers who are new or have good credit — about one-third of U.S. cardholders generally pay their bills on time.

Let us never forget that Senator Barack Obama voted against setting a cap on credit card interest rates at 30%. Did anyone really think he would stand up to the banksters this time? By the way, Senator Hillary Clinton voted for that cap on interest rates back in 2005.

I’ll bet you’re wondering if there is any good news about this credit card “reform” bill. Well if you you like guns, there is. Bernie Sanders’ amendment went down in flames, but the amendment to allow people to carry concealed weapons in our national parks made the cut! Ain’t that great?

CALLING FOR A MUCH NEEDED INTERVENTION!

shopping-online

I love shopping online! I have to ask myself , could I get any more indolent than I am now? I mean, how much easier can they make it for you then by keying in your credit card number (and in many instances they remember it for you for God’s sake!) while all you are required to do is just hit the “Submit” button and wait for the latest thing to arrive. It’s like Christmas all year round!

I must have been bored this week because I was very busy as you will see. It even required my credit card company to call and ask if these purchases were actually mine. Yes, yes, I replied, not to worry, I was just in that kind of mood.

My ink cartridge to my printer went dry so I ordered a new one online to the tune of $26.00 and the roll started from there.

The undercounter radio that I have had for about 12 years suddenly stopped working. I loved that radio which also came with a light and timer. Off I went to the computer in search of a new one and found almost the exact same item only this time upgraded to contain a c.d. player and an instant weather report! Order placed, address given, credit card recorded, and “submit”. Easier then fighting the crowds. And who can actually go without having an instant weather report at their fingertips? This item had my name engraved right on it. Continue reading