Financial Product Safety Commission

Those poor Republicans. No matter how hysterical they get, no matter how much they shriek and shout (don’t those spewfucks ever get laryngitis?), there’s always something else to get their panties in a wad. There’s always another threat to The America They Grew Up In.

Republicans already have their hands full battling Socialized Medicine and that treehugging energy legislation that Obama is pushing. And now their latest hissy fit: the proposed Financial Product Safety Commission.

This article was written by Bob Sullivan, author of Gotcha Capitalism.

This will be the first new federal consumer protection agency since the 1930s. The Financial Product Safety Commission will take over some of the jobs that existing agencies have been neglecting. The FDIC, Federal Reserve, Comptroller of the Currency, Office of Thrift Supervision, Federal Trade Commission and National Credit Union Administration will all have some of their responsibility and authority transferred to this new agency.

Gail Hillebrand of Consumers Union said consumer protection has been split among all of those agencies, and each one has passed the buck to somebody else. “It's a reflection of the degree to which those folks haven't done the job. Consumer protection is too important to be the orphan in the regulatory system. It has been everybody's last priority.”

Barney Frank and Christopher Dodd will be introducing legislation in the House and Senate respectively. This agency will have the power to:

Review new contracts (e.g. credit card terms of service agreements) and demand that these contracts be clearly written;

Require banks to store and share information that would help consumers compare terms and conditions;

Issue subpoenas to examine bank records when a complaint is being investigated;

Allow state governments to enact even tougher consumer protection laws; and

Extract fines — anywhere from a thousand to a million dollars per day — against banks who violate these rules.

Works for me.

Needless to say, the banking industry and the U.S. Chamber of Commerce are drawing up their battle plans. They’ve instructed their prostitutes in Congress to bend over and gyrate like they’ve never gyrated before, and they’re preparing a ton of sleazy TV commercials.

Since the health insurance lobby has had so much success with their phony “grassroots” organizations, maybe the banking industry will try the same thing. Get ready for some more of those spontaneous demonstrations. Millions of everyday Americans will suddenly fly into a rage at the thought of “Socialized Banking!” “Keep those bumbling government bureaucrats out of MY bank account!”

Reining In Credit Card Abuses

Finally. It isn’t a done deal yet, but the House has passed a bill to protect consumers against being suckerpunched by their credit card carriers. The House vote was 357-70. The bill is expected to be passed by the Senate and signed by Obama.

Sudden and/or retroactive interest rate hikes, double-cycle billing, issuing credit cards to anyone under 18 — say goodbye. This law won’t take effect until next year, except for the provision requiring 45 days notice before increasing interest rates. That will be effective in 90 days.

The bill has bipartisan support, but some Republicans trotted out their tired cliché that this bill would take away choices and credit opportunities for consumers. [yawn]

I agree with the other main conservative argument against laws like this: that it’s up to everybody to read something before they sign it. No argument there. But that doesn’t mean these underhanded fees and penalties hidden in the fine print — known as “Gotcha Capitalism” — should be legal.

It’s up to everybody to defend themselves against being attacked on the street, but that doesn’t mean robbery and assault should be legal.

Now, about that conservative mantra of “Read the fine print, Stupid!” — check out this other story and see how they react. The Washington legislature has passed a law — it hasn’t been signed by the governor yet — that’s designed to keep state parks open.

When Washington motorists pay their annual vehicle license fee, they have the option (“Opting In”) of paying an extra $5, which goes toward maintaining the state’s parks. This new law changes “Opt In” to “Opt Out.” Until now, motorists would pay this extra $5 only if they put a checkmark in the Yes box. Now, they’ll be paying that extra $5 automatically UNLESS they check the No box.

Lawmakers are expecting this “adjustment” to raise an extra $20 million to keep state parks off the chopping block. Personally I don’t think it’ll raise anywhere near that amount, just because the public is getting more skeptical and more wary about everything.

But for some odd reason, those same “Why didn’t you read the contract first, you Idiot?!?!?!?” Republicans are just appalled — sick with worry — that a few harried vehicle owners might be unwittingly donating $5 towards keeping state parks open.

Go figure.

cross-posted at Bring It On!

Court Rules Against Gouging by Cell Phone Carriers

A judge has ruled that Ford Motor Company can no longer penalize you for trading in your Ford and buying a Chevy instead. And Safeway can’t make you pay a fine if you go across the street and shop at Albertsons.

Of course those two things never happened. But this is what cell phone companies have been doing for years. And a California judge has finally ruled against this legalized extortion. Sprint Nextel has to refund $18 million to its ex-customers who paid early termination fees. Sprint was also ordered NOT to try collecting $55 million worth of fines from their other ex-customers who refused to bend over and pay the termination fee.

A small step for common sense. Finally. The ruling came from Alameda County Superior Court Judge Bonnie Sabraw. Now that the first domino has fallen, other states will hopefully issue similar decisions.

These early termination fees are just a small part of what Bob Sullivan calls Gotcha Capitalism. Hidden fees and surcharges, booby traps hidden in the fine print on page 87 of a contract — what kind of cesspool have we sunk into? Capitalism used to be about merchants competing with each other to see who could sell the best product at the best price. Now it’s all about who can be the sleaziest douchebag of them all.

If these slippery practices are “capitalism,” then it’s also capitalism when a mechanic doesn’t do any work on your car, but tells you “OK, I rebuilt the carburetor, put in a new U-Joint and replaced all the fluids. That’ll be $1200.”

Sprint and other carriers are trying to get the FCC to come up with a federal mandate. An FCC ruling would override all state laws and invalidate all state court decisions. How convenient.

That’s funny, “States’ Rights!” used to be the conservatives’ favorite slogan. What happened?

cross-posted at Bring It On!

You're Getting Mugged by American Corporations

If it seems like all of those hidden fees and surcharges are nickel-and-diming you to death — they are. Every time you turn around it’s $5 for this banking transaction, $10 added to your phone and cable bills for God knows what.

These hidden fees cost Americans $45 billion dollars a year. That’s roughly the same as the amount lost to Identity Theft each year. Unlike ID theft, these hidden fees are perfectly legal. After all, our legislators and regulatory agencies are fully owned and operated by the industries they're supposedly “regulating.”

This $45 billion doesn’t include penalties or late fees; these are simply the hidden charges you automatically pay every time you purchase a product or use a service. These hidden fees cost the average American almost a thousand dollars a year. Ah heck, you weren’t planning to use that thousand for anything, were you?

These hidden surcharges also don't include anything "extra" like vacations. This article is only based on the mundane everyday things you do: making phone calls, going to the bank, watching TV, using the Internet, saving for your retirement, buying groceries, etc. If you're some sort of spendthrift who likes to take fancy vacations, you might be paying closer to $4,000 a year in hidden fees.

The author of this article says: “Sneaky fees peck away at us like a swarm of mosquitoes that ruin an otherwise beautiful summer evening. And like mosquitoes, an individual bite might seem trivial, barely more than a nuisance, but repeated bites can actually change the way you live. They chase you inside, make you build a screened porch, and in extreme cases make you sick.”

He uses the term “Gotcha Capitalism.” “Gotchas are everywhere you turn, now. They are a way of life for consumers. They are our economic system, one that has replaced our former system, the free market economy. Gotcha Capitalism — your personal finances, under siege. Mosquitoes might threaten your life with death by 1,000 bites; Gotcha Capitalism threatens your finances with death by a thousand fees.”

cross-posted at Bring It On!