Federal Reserve Finally Does What Congress Won’t Do
Thank God for our system of checks and balances. For the past seven years, Congress has been having an ongoing orgy with the banking industry. And now, finally, the Federal Reserve is about to step in and do Congress’ job for them. Somebody has to do it.
The “legislative” process has pretty much deteriorated into a giant whorehouse on Capitol Hill, with our Congressional
The Federal Reserve, the National Credit Union Administration and the Office of Thrift Supervision are working cooperatively to do what our
This will be the most far-reaching crackdown on the credit industry in several decades. They’ll be putting limits on some of the credit card industry’s favorite sleaze tactics that we’re all too familiar with:
Two-cycle billing, where there’s an interest charge even during a month when you aren’t carrying a balance.
Deceptive advertising — that bold 68-font headline screams “0% interest!” and the .01 font sentence on page 73 says “interest rate may go up to 999% after three months.”
Retroactively raising the interest rate on existing balances. (Under the new proposal, banks could still raise rates retroactively if the cardholder is at least 30 days late with a payment.)
This new law will also prohibit credit card companies from raising a customer’s interest rate for reasons unrelated to the account. A late payment on a different credit card, or even making a large purchase on another credit card that’s within the credit limit — these have all been popular (and legal!) excuses for jacking up a customer’s interest rates. No more.
Like any wealthy john whose expensive orgy was suddenly interrupted, the banking industry is indignant. The American Bankers Association has ordered their mascot, Ken Clayton, to tell reporters: “This is a very aggressive regulatory intervention in the marketplace that will lead to higher prices and less credit options for everyday consumers.”
The banking industry is concerned about everyday consumers — how touching.
cross-posted at Bring It On!