Obama To Go On Offensive Against Credit Card Companies Soon

• May 9, 2009

Yes, those mean and evil credit card companies who force you to buy things you really can’t afford. They’re victimizing Americans!
Got it. The guy who went out and bought a $4,000 home entertainment system he couldn’t afford, or the woman who went on a European vacation on her credit card, they’re victims.

WASHINGTON, May 8 (Reuters) – U.S. President Barack Obama will hold a town hall meeting next week in New Mexico to promote congressional efforts to reform credit card practices, the White House said on Friday.
Banks such as Bank of America Corp (BAC.N)>, JPMorgan Chase & Co (JPM.N), Citigroup Inc (C.N) and Capital One Financial Corp (COF.N) face a new set of rules issued by the Federal Reserve last year aimed at reining in abusive credit card practices.
The rules are to be implemented by July 2010, a date some lawmakers and consumer groups complain is too far away to help struggling consumers.
U.S. lawmakers are trying to codify those rules in legislation and send it to Obama this month to sign into law. Legislative efforts are aimed at stopping credit card companies from imposing certain late fees, restricting retroactive rate increases, as well as other questionable billing practices and marketing to minors.

What I don’t understand is this: Obama and his fellow liberals have been working hards to get the banks to begin making loans again. Subsidies. Bailouts. Regulatory pressure. They’re pushing us back to the same sort of indiscriminate lending practices that got us into this mess in the first place. Now Obama is targeting the credit card companies, and he’s going to force regulations down their throats that make it easier for people to run up big balances on their cards that they can’t possibly pay off.
At what point do we admit that the problem America has had isn’t with mustache-twirling finance executives, or black-hatted credit card companies, looking to cheat everyone? When do we admit that the real problem is Americans simply taking on more debt than they can afford? And that making it easier for them to take on that debt, go delinquent on that debt and even default on that debt really isn’t solving anything?
The problem here is twofold. First, Obama isn’t a leader. He’s a pandering simp more worried about staying in power than anything else. So rather than speaking the truth, which is that Americans need to quit acting like victims and stop living beyond their means, he’s going to tell everyone they’re victims and go after their perceived enemies.
Second, Obama actually wants Americans to be in debt. Particularly in debt to banks controlled (or at least heavily influenced) by the government thanks to regulation and bailout string-pulling. All the better to expand the government’s power and influence over the populace.
It’s easy to dislike credit card companies, but it’s also hard to feel sorry for Americans who sign up for credit cards without bothering to review the terms of their account and who then proceed to run up debt they can’t possibly pay off.

Tags: Asshats, Domestic Issues, Politics

http://Array carrick

Kenny:

So, in other words, the credit card has noticed you’re not a very responsible spender, and raises the rates.

Well that would be one reason. Another is seeing an opportunity to put the screws to you.

There’s no law against that.
carrick

Beyond them not being an IOU, their business is to charge as much as the market will bear.

I’d say the best advise for your friend is to find a reputable credit protection agency to work with, set up agreements with the credit card companies so they can pay off their principal balance plus some interest, and go on with life. CCCS is a good one.
carrick

Kenny:

Timeshifting, while not the most responsible practice, would not be affected. If you pay off your balance every month, the interest rates don’t affect you.

That’s a good point.

It’s mostly people who have outstanding balances that are time shifting that would be affected.

As I said my solution is simply to avoid dealing with them.
http://SayAnythingBlog.com The_Whistler_ofnd

The question would be is this a federal obligation. It is done by the mail and is interstate commerce.
http://insanereindeer.blogspot.com/ Kenny

Example of an affected customer: a friend’s mom is disabled, with no real source of income outside of welfare. She’s been racking up massive debt on her credit cards for years. She’s making the minimum monthly payment, but she’s spending more than that every month…so her debt is increasing. Realizing she’s not ever going to pay all of it back, the cards have raised the interest and put a cap on spending. Naturally, the woman is indignant. “How dare you not let me spend anymore money? I have been at this bank for years!” Given this woman’s poor health and spending proclivities, she could (if left unchecked) wrack up another 100k in debt before she goes.

Credit cards aren’t an IOU to the person you’re buying something from. The bank has to pay the money, and then wait for you to pay them back. If you do it on time, this is a good deal for the bank. They break even in short term loans, or in cases like using your card to buy a car, as long as you make monthly payments, they’re making a profit. But if you spend more than you pay, the bank loses. They have to raise interest just to recoup costs or even sometimes to come in at a modest lost. Like everything else, interest rates are meant to make you stop spending money. It’s not about putting the screws to you, so much as it is the bank assessing your risk factor. But since no one likes big corporations, it MUST be an evil plot to destroy poor unsuspecting victims.
carrick

Mangled sentence “or even can be changed to a new rate after a given time [a new rate] automatically comes into effect.”
robert108

I can never see how anything works…

Probably your low IQ and govt education.
carrick

Kenny:

But as you pointed out, the option is there to freeze rates and just not spend anymore on that card.

Unfortunately I know far too many people who weren’t aware of this option (it’s in rather small fine print). The other problem is with people who made irresponsible decisions and ended up with large balances but were still time-shifting.

Irresponsible yes, but people get stressed and make mistakes.
http://SayAnythingBlog.com The_Whistler_ofnd

I don’t see that reform of some of the practices the credit card agencies would be bad.

I think there is room for some consumer protection from raising interest rates and fees any time they want.

This is a winning issue for Obama.
Buzz

Credit card companies hook young couples with low percentage promises, then jack the rates to 24% if they miss only one on time payment. There defiantly needs to be regulation to protect the consumer against the bait and switch policies of the card companies.
docdave

If you sign on to a credit plan that lets them switch around your interest rates…whose fault is that?

If one doesn’t treat credit card convenience as a long term loan this isn’t a problem at all. Credit cards were intended to be an alternate to cash so one didn’t need to carry a lot of cash to pay for their purchases. Paying ones accummulated charges each month eliminates the interest problem.
http://www.myspace.com/thekingscourt4u Gman

When do we admit that the real problem is Americans simply taking on more debt than they can afford?

When we get out of the “Blame everybody else” mentality. It’s the big Corporations: Drug Company’s, Oil Company’s, Auto Makers, Banks, you pick it.

When is it ever going to be the ‘Big Government’, and mostly the Lawyers that are the root cause of the problems. We need serious Tort Reform in this country, along with term limits, and I see the two going hand in hand. And… if not by choice, then by force.

When the Lawyers make the laws, there is a serious problem.

The founding fathers put a civilian in charge of the military for just that same reason.

They saw the necessity of citizen government, and couldn’t even imagine the idea of a lifelong tenure in the Senate or the House. They made them limited terms for a reason. The only government position they envisioned as being long term was Supreme Court Justice. And, even then, they couldn’t imagine the direction our courts have taken, in making laws from the bench.

What do you call a bus load of Lawyers going over a cliff? ……..

A good start.

What’s the definition of a shame….? A bus full of lawyers going over a cliff…..with the back two seats empty.
http://insanereindeer.blogspot.com/ Kenny

Well that would be one reason. Another is seeing an opportunity to put the screws to you.
There’s no law against that.

But as you pointed out, the option is there to freeze rates and just not spend anymore on that card.

The only change we really need is that credit cards need to make the notification of change of policy obvious.
robert108

Jen: It’s the simple truth. The only predatory lender in this economy is Obama’s govt. In fact, the unworkable lending practices mandated by the Dem social engineers have never been rescinded. Obama is trying to generate the next housing boom/bust with his irresponsible spending and political rigging of the markets.
carrick

Rob:

That being said, that’s not really his intent here.

I think you are overstating “intent” with a presidential noob like Obama.

This entire project was Giethner’s idea, not Obama’s.
http://insanereindeer.blogspot.com/ Kenny

Once my kids reached 18 years of age they were flooded with card offers, with no credit rating.

And once I turned 18, the same thing happened. My parents encouraged me to sign up for one, put about 20 bucks on it per month, then pay it off regularly to increase my credit.

There is nothing to even stop them from changing your rate even if you didn’t miss a payment. The only limitation is they can’t change the interest rate without allowing to pay off the old balance and close the account.
It would be perfectly legal for them, for example, to notice that your spending patterns suggest that you have become reliant on the card for your monthly finances (there are people who “time shift” payments by using the card then paying it off in full when it becomes due), and then jack up the card’s interest rate.

So, in other words, the credit card has noticed you’re not a very responsible spender, and raises the rates.

Timeshifting, while not the most responsible practice, would not be affected. If you pay off your balance every month, the interest rates don’t affect you.
robert108

Now Obama is targeting the credit card companies, and he’s going to force regulations down their throats that make it easier for people to run up big balances on their cards that they can’t possibly pay off.

Obama wants to control the supply of credit. Totalitarians always want to control supply, then they have to set the price, which ultimately leads to govt rationing, and a conversion of our demand economic system with a command system, with the govt ruling elite in control.
See how that works?
andophiroxia

Kenny put that in pretty plain English.
carrick

Rob:

But they’re also clear on that when you sign up for the credit.

“They’re also clear…” Brahahahahaha!

That’s not even close to the truth.

They change the terms of agreement, at which point you have the option to retain the original interest rate, but can’t make further charges. Or accept the new credit rates and new terms of agreement. You wouldn’t be able to find the new terms of agreement because it wasn’t present when you signed up for the card.

There is nothing to even stop them from changing your rate even if you didn’t miss a payment. The only limitation is they can’t change the interest rate without allowing to pay off the old balance and close the account.

It would be perfectly legal for them, for example, to notice that your spending patterns suggest that you have become reliant on the card for your monthly finances (there are people who “time shift” payments by using the card then paying it off in full when it becomes due), and then jack up the card’s interest rate.

An unregulated or poorly regulated market really is not in our best interests.

If you sign on to a credit plan that lets them switch around your interest rates…whose fault is that?

. Right now any credit plan allows them to shift the interest rate for any reason. It’s called a “change in terms of agreement”.

And if this change in terms of agreement is being systematically abused, then the proper answer it is the government for failing to provide a well-regulated market environment.

One solution to the current mess (and it is a mess) is to not use interest charging credit cards. (My only card is an AmX card.) That’s been my solution to the problem. If you can’t trust them, f**k them.
Buzz

But they’re also clear on that when you sign up for the credit.

Maybe people should read the terms before signing on for a credit card.

Because they can do it doesn’t make it right. It is not allowed on home or car loans to bait and switch so why should it be legal to do it for credit cards? It is simply a loophole for banks to make more money at the expense of consumers.

Once my kids reached 18 years of age they were flooded with card offers, with no credit rating. The card companies are looking to entrap young people with fees and fines. My advice to them was not to get any card that didn’t come from their own bank. At least you have the leverage to threaten to pull your accounts from them if you make a mistake, or on vacation and miss a payment. They used to give you a month to pay a payment, but now it is as little as 10 days from when you get the notice, which is bullshit.
carrick

Rob:

But it’s all happening under Obama.

Geithner is a loose cannon who is leveraging off of Obama’s noobness.
http://www.myspace.com/thekingscourt4u Gman

Obama just changed the terms of taxation for my kids. Where are the controls on that?

I say we do something to control the out of wild ass spending and the use of ChiCom debt to fund the government.
http://oohbabycompoundme.com/ Jen

They’re pushing us back to the same sort of indiscriminate lending practices that got us into this mess in the first place.

I’m wondering if the author of this blog works for a creditor or lender.It would be the only reason I can understand this perspective.
Buzz

See how that works?

I can never see how anything works in your twisted mind.
carrick

Also to make sure we’re clear on this, I’m quite aware they can change the rate if it’s locked to the treasury rate, or even can be changed to a new rate after a given time automatically comes into effect.

The scenario Buzz was describing isn’t like that though. They go from 8% to 24% with a new terms of agreement, after getting the new card owner “hooked” on the credit card.

Is it really in best interest of credit card companies for people to avoid using any of them, because of the (not very far-fetched) assumption they will try and rip you off?
robert108

Credit card companies hook young couples with low percentage promises, then jack the rates to 24% if they miss only one on time payment.

Bullshit! You can’t cheat an honest person who has high personal moral standards and who knows you can’t get something for nothing.
http://insanereindeer.blogspot.com/ Kenny

Unfortunately I know far too many people who weren’t aware of this option (it’s in rather small fine print). The other problem is with people who made irresponsible decisions and ended up with large balances but were still time-shifting.
Irresponsible yes, but people get stressed and make mistakes.

The simple solution then, seems to be to make the policy change more obvious. Put it on the front page of the statement “Your rates are going up.” At that point, the person has the obligation to call the credit card company and say “Uh, wait a minute here.”

As ellinas charming points out, and I’ll paraphrase, “Make sure you know what you’re signing your name to, it can have consequences.”
http://sayanythingblog.com robport

If Obama’s just talking about making the legalese easier to understand, and more apparent on credit card offers, then I’m not going to argue much. Transparency is generally a good thing.

That being said, that’s not really his intent here.
http://sayanythingblog.com robport

Well, this plan to give the Treasury and/or Federal Reserve the power to nationalize at will is Geithner’s too.

But it’s all happening under Obama.
http://sayanythingblog.com robport

Credit card companies hook young couples with low percentage promises, then jack the rates to 24% if they miss only one on time payment.

But they’re also clear on that when you sign up for the credit.

Maybe people should read the terms before signing on for a credit card.

Whistler, I don’t doubt that this is a winning issue for Obama…because everyone hates the credit card companies. We hate them as much as Americans would hate the federal government if we had to pay our taxes in a monthly bill like we pay the credit cards.

But that doesn’t mean what Obama is doing is right. If you sign on to a credit plan that lets them switch around your interest rates…whose fault is that?
http://suitepotato.blogspot.com/ sayanything-4808

Buzz:

Credit card companies hook young couples with low percentage promises, then jack the rates to 24% if they miss only one on time payment.

Entirely true. The rates we’re seeing out there bring to mind the word “usury”.

r108:

Bullshit! You can’t cheat an honest person who has high personal moral standards and who knows you can’t get something for nothing.

Exactly which portion of the population would that be? The gigantic asleep at the switch portion that put Bareback O’Rama into office? The large portion that thinks Dancing With the Stars is high culture equal to Shakespeare? The portion of the population busy signing credit applications as fast as their pens can whiz across the paper?

The problem is we have nearly no controls on the credit companies anymore and at a time of growing irresponsibility in America, and a time of growing encouragement of a victimhood mindset by our elected officials, namely the particular political wing of the present which thought that the L.A. Riots were just poor people “getting theirs”.

We need damn strict regulation but it’s unfortunately coming from exactly the least responsible people for the job.

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Obama To Go On Offensive Against Credit Card Companies Soon

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