Today on CNN Newsroom
Getting a grip on fees: Pres. Obama to sign credit card reform bill
Feeling powerless over skyrocketing interest rates and fees on your credit card?
Well, come February 2010, you'll gain some significant strength.
President Obama is about to sign into law a bill that will put major restrictions on banks that are raising interest rates and fees on cardholders.
Under the new rules, banks will not be able to increase rates on cardholders' existing balances, until they're more than 60 days late on a payment.
Over-the-limit fees and late charges will also be curtailed.
But the measure doesn't completely rein in banks.
There are still no caps on interest rates and fees.
Should the measure have included stronger protections for Americans who are struggling to pay down large balances ... especially when many of these banks are recipients of taxpayers' bailout money?
Tell us what you think.
By Maegan Ahern
Writer
On Twitter
I'm glad we're doing something about the credit card problems our country is facing, but just WHAT does allowing guns in national parks have to do with credit card reform?! I'm starting to think a lot of things in the government aren't quite making sense anymore.
I think it is excellent. Credit card companies are loan sharks in disguise. I'm thankful I only have one credit card, but for the American that is drowning in debt, this is a way to let them know that things will turn around.
Capitol One raised my interest rate to 13.99% from 5.21% this week. I owe 3,000. and pay $400. monthly on time every month. So it seems that the card companies will up their interest rates BEFORE this law goes into effect, so what good is it??? Nonsense in having guns in National Parks unless a Ranger is in need of them. The NRA is really desperate, aren't they? Karon
I think the bill is great, however, I think it should go into effect immediately. The day before the Senate passed the bill, I received 2 notices that effective July 2nd, my rates would be increased to 17%. Both from Capital One – two different cards. How is this going to help us? It just gives the credit card companies time to do whatever they want between now and early next year.
As a former 15 year credit card employee. I think this a geat step toward protecting the customer,finally. Congress should have gone one step further and tried to anticipate where the bans will make that income up. That will be the next atrocity
Do you honestly think congress will mess with the banks; banks control the most powerful lobbyist in the nation. We just haven't seen the loop holes that the bank lobbyist has written into this bill. Congress can not and will not bite the hand that feeds it.
It's a useless gesture of the government to attempt to control banks. They have minds of their own, driven by the very capitalistic hunger that spawned this great country. Those who knowingly got in over their heads are clamoring for the government to help when it's their own fault that they are LIVING BEYOND THEIR MEANS.
Those who have been mislead, though, are the ones for which I have compassion. However, it's not right for the government to step in and protect against future lies without punishing the those who have already lied!
The people who are going to feel the brunt of this new bill are not bankers. The victims of this bill are the people with clean credit, folks who have high credit ratings and take advantage of rewards programs, the lack of annual fees, and who pay off their debts on time, ahead of time, and monthly.
Most egregious is the government limiting how soon banks can raise rates, but not how much. It used to be a few percentage raise if you were late more than a month more than a few times. Now, I'll bet that if someone doesn't pay for 60 days, banks will add 5-10% to the APR without flinching.
This legislation is too much and not enough at the same time: it's too much government for our capitalistic economy, but it's not enough to actually do anything good for /anyone/.
Regarding the credit car reform, this is where the billion dollar bail out should have been focussed. This would have gotten millions of people out of sept and they would have money to spend and stimulate the economy.
This is another example of Pres. Obama forcing those that take care of their business i.e. paying their mortgage, taxes, and bills to pay for those that DON’T. I don’t mind and I do help those that need a hand-up but why do I have to pay for those that have too much mortgage and too much debt. For reference my home cost $135,000 and I don't have any revolving debt.
Michael
The Credit Card Reform Bill is a great start, but didn't go far enough. The bill should have included a major overall of the credit rating model used by credit rating companies to compute your FICO score. For example, Americans FICO score will be adversely impacted as we try to eliminate debt by canceling or not using credit cards. Even when the banks arbitrarily cancel your CC or reduce your limits, your FICO score will drop. Americans need to be able to cancel CCs without affecting FICO scores. This is extremely necessary before CC companies reinstate the exorbitant annual fees again. All combined, these are just schemes to forever enslave Americans to credit cards.
Sol
Stone Mountain, GA
This legislation is long overdue however it did not address one important item. The credit card industry is the only industry that does not provide a grace period before assessing a late charge. Mortgages allow a 15 day grace period, auto loans 10 days & most commercial loans 10 days. In my opinion they would have no greater credit risk during these 10 days. With the scrutiny they are under and the poor economic environment that exists, they are missing a PR opportunity of a lifetime. In regards to the gun bill attachment what happened to President Obama's commitment to control lobbyists. Is the Senate & Congress that afraid of the NRA? Too big to fail I guess. President Obama should veto the bill as presented and require it to be submitted without a gun provision. The bill doesn't kick in for several months which gives them time to rework it and shorten the time frame for implementation.
It is about time our Government, which is owned by the Banks and Insurance Companies, does something to to protect the taxpayers that pay for the Government. However, this world would be better off without credit cards.
well the day that this bill went to be voted on i recieved 2 notices from capitol one, with whom i have 2 credit cards..they informed me that the rates on both cards..they raised the rated by more than 7% on each...both were generic notices with explanations that were nothing more than b.s....this company lowewred my rates due to me being as they called it" a good customer who always pays on time"...now this is all being wiped out by the greed of this bank...perhaps an investigation is in order to find out why capitol one is raising interest rates so drastically ahead of this legislation...
Finally, Obama "reduces " the consumer abuse from credit card companies ( lobbyist ). Where has "our " legislatures been for past ten years ? ( In the pockets of the lobbyist ). The problem – All the credit card companies have already increased the rates and reduce credit.
Solution – make changes retroactive back to October 1, 2008.
Waht about re – instatement the "usury law " ? Save the consumer, Please !
This new credit card bill is WEAK!
I am getting all sorts of "opt out" notices in the mail. I can accept the new terms (which the new bill can't cancel) or I can close my account.
Such a deal!
AND none of these new weak rules will even apply till 2010. Between now and then companies can do pretty much they are doing now.
Business as usual.
I think it's great that President Obama has taken this step to curtail credit card companies' "do as they please" policy. These companies take people to the cleaners every day and there is no recourse for consumers. Thank you President Obama and thank you CNN for the open forum so people can share their views.
Blessings!
The new rules will help some, but pushing back implementation until next year just gives the credit card companies another year to gouge consumers before they have to start playing by the new rules. I have already received notice that the interest rates on 2 of my credit cards will increase on July 2nd. My accounts are in good standing, and I pay more than 3 time the minimum amount due on each of those 2 cards every single month. It seems like the credit card companies want to push people into default.
Oh so we have to wait until next year. Watch the gouge now!! It should be effective immediately.
I was a WAMU customer with a credit card at 9.9 percent APR. When Chase Bank took over, they changed my APR to 17.99%. I just received my second notice that my rates will go to 22.99%. I am glad hat the President and Congress will implement laws for credit card change. In the meantime, the war continues. I fear the credit card companies will only raise rates now to capture as much as they can before the new laws go into effect.
I feel it is small step in the right direction: Credit Card companies have far too long taken advantage of people in need with fees and hiked up interest rates. I am really glad to hear and see that he is striving hard to change the way big companies do business.
from The Pen
The Credit Care Bill S. 627 Is A Sham Without Usury Protection
The headline today read "Reform may mean good card users pay more",
even as the Senate passed their totally phony credit card bill, S.
627. The one thing that actually mattered, an amendment to limit
interest rates to a very generous 15 percent was killed. With the
government bailing out some of these same companies, and giving them
money for zero interest, how greedy can they possibly get? Oh, but
they had no problem tagging on a totally unrelated Wild Bill Hickok
in our national parks provision.
How stupid do they think we are? What we are left with is a cosmetic
makeover which will continue to bless outrageous interest rates with
no real protection for the American people at all, another charade of
reform which actually changes nothing of substance. In fact, the bill
expressly gives credit card companies an additional 9 months to rip
us off without any new restrictions whatsoever. Congress needs to
know they are not fooling us one little bit on this one.
No Usury Action Page: http://www.peaceteam.net/action/pnum986.php
Besides submitting the action page at the link above, we are asking
our participants to also call their members of Congress toll free at
800-828-0498, 866-338-1015 or 866-220-0044 (all numbers just checked
good) to protest their failure to actually confront the core problem
.. unrestrained interest rates. They will be voting in the House in
a matter of days.
So what if they must give at least 45 days notice before raising out
interest rates to the sky. Where are we the American people to go, as
the job market collapses around our ears? The credit card "industry",
just like the medical insurance "industry", is just a giant leech
sucking the lifeblood out of our economy, without adding anything of
value to it.
The reason we are making such a point of this action is that they
have the same phony reform routine planned for health care, in trying
to perversely ban from public debate the one thing that would
actually cure the patient, single payer universal health care.
The 30% eaten up by paper pushing, claim denying, overpaid medical
insurance company bureaucrats, has already got the rest of us barely
holding on to life support. And here especially, we need to demand
that we get legislation that isn't just written by corporate
lobbyists to preserve their power to take an arm or a leg for
themselves.
So if you have not yet submitted the action page for single payer
health care, please do that as well.
Single Payer Action Page: http://www.peaceteam.net/action/pnum982.php
A large part of the economic recovery is dependent on consumer spending. Raising interest rates on credit cards forces people to spend less. Credit card issuers should be immediately restricted from increasing rates for at least the next full year. Their greed is what caused this problem in the first place.
I have always thought it odd that the words which pose the greatest liability to the consumer were put in microscopic font:; if a contract has integrity should not all the words be legible? I am glad the we are a nation finally being transparent enough to move from deceptive to truth.
It appears that even though as a country we are financially in trouble, law makers, politicians, and corporations are still running business as usual. We need help now not next year when we are all bankrupt. All these new laws that are being created (week help) do not go into affect until its too late. What will it take for lawmakers to get serious? This is no joke. Lawmakers allowed this to happen and they are still acting as though is is not a big deal.
It's a step in the right direction but doesn't address exhorbitant usury rates.
Who Voted Against Capping Credit Card Interest Rates?
By Carl Hulse
It was just a procedural vote in the debate over new credit card rules, but evidently the overwhelming Senate vote against capping the rate of interest that credit card companies are allowed to charge their customers struck a chord with the public.
Multiple readers have written in the wake of Wednesday afternoon’s vote asking for the identity of the 60 senators who opposed the 15 percent cap proposed by Senator Bernie Sanders, independent of Vermont.
The vote was on a motion to waive budget rules to allow the proposal by Mr. Sanders to be added to the bill and required 60 votes to pass. Mr. Sanders and others have argued that the credit card companies are engaged in what amounts to usury by charging as much as 40 percent interest.
All of the supporters were Democrats except for Senator Charles E. Grassley, Republican of Iowa. – Read the Senate’s roll call vote on the motion.
Yes Votes (33) (to cap interest rates – the good guys)
Member Party State
Bob Casey Jr. D PA
Ben Cardin D MD
Roland Burris D IL
Sherrod Brown D OH
Barbara Boxer D CA
Michael Bennet D CO
Mark Begich D AK
Ron Wyden D OR
Jim Webb D VA
Tom Udall D NM
Mark Udall D CO
Charles Schumer D NY
Bernie Sanders I VT
Harry Reid D NV
Jack Reed D RI
Jeff Merkley D OR
Robert Menendez D NJ
Claire McCaskill D MO
Carl Levin D MI
Frank Lautenberg D NJ
Herbert Kohl D WI
Amy Klobuchar D MN
John Kerry D MA
Daniel Inouye D HI
Tom Harkin D IA
Charles Grassley R IA
Kirsten Gillibrand D NY
Dianne Feinstein D CA
Russell Feingold D WI
Richard Durbin D IL
Byron Dorgan D ND
Christopher Dodd D CT
Kent Conrad D ND
No Votes (60)
Member Party State
Thad Cochran R MS
Tom Coburn R OK
Saxby Chambliss R GA
Thomas Carper D DE
Maria Cantwell D WA
Robert Byrd D WV
Richard Burr R NC
Jim Bunning R KY
Sam Brownback R KS
Christopher Bond R MO
Jeff Bingaman D NM
Robert Bennett R UT
Evan Bayh D IN
Max Baucus D MT
John Barrasso R WY
Lamar Alexander R TN
Daniel Akaka D HI
Roger Wicker R MS
Mark Warner D VA
David Vitter R LA
John Thune R SD
Jon Tester D MT
Debbie Stabenow D MI
Arlen Specter D PA
Olympia Snowe R ME
Richard Shelby R AL
Jeanne Shaheen D NH
Jeff Sessions R AL
Pat Roberts R KS
Jim Risch R ID
Mark Pryor D AR
Ben Nelson D NE
Bill Nelson D FL
Patty Murray D WA
Lisa Murkowski R AK
Mitch McConnell R KY
John McCain R AZ
Mel Martinez R FL
Richard Lugar R IN
Blanche Lincoln D AR
Joseph I. Lieberman ID CT
Mary Landrieu D LA
Jon Kyl R AZ
Ted Kaufman D DE
Tim Johnson D SD
Mike Johanns R NE
John Isakson R GA
James Inhofe R OK
Kay Hutchison R TX
Orrin Hatch R UT
Kay Hagan D NC
Judd Gregg R NH
Lindsey Graham R SC
Michael Enzi R WY
John Ensign R NV
Jim DeMint R SC
Michael Crapo R ID
John Cornyn R TX
Bob Corker R TN
Susan Collins R ME
Did Not Vote (6)
Member Party State
Sheldon Whitehouse D RI
George Voinovich R OH
Jay Rockefeller D WV
Barbara Mikulski D MD
Patrick Leahy D VT
Edward M. Kennedy D MA
The law may not be as effective as we hope because the banks are already devising ways around it. Just yesterday, we received a letter from {company} notifying us that our current interest rate (9.9%) is now considered to be a "promotional" rate (despite the fact that we've had the card for two years at this rate). Effective April 2010, our rate will practically double to an estimated 17.9% (or 14.65% above prime, which is currently 3.25%). We pay off our balance every month, and have never been late on a payment. We don't see how this new law will "rein in" the banks...
I have a credit card with {company}. I have a guarenteed interest rate for life of 8.9%. I have never, never, never been late on any payment, or exceeded my limit. In fact, I have always paid over the minimum required payment. {Co.} sent me a statement after my father had died and a I checked into the possiblity of renting a car where I had to fly to deal with my father's remains and my mother who was in the hospital in the same town. When I returned from my trip I found a letter from {co.} in my mailbox stating, "due to economic conditions beyond our control..." we are raising your interest rate from 8.,9% to 17.9%. I sent two letters, one to {co.} and the other to the credit agency listed on the rate increase statement requesting "WHY"? The response was the same bull of economic conditions stating further they were not aware of the particular promotion my card which initiated my agreement it was no longer a condition of my card. "Guareenteed for life, no excuses" was the original offer I accepted from {co.} and now they deny it. Perhaps, you can find the proof of these scammers and corporate 'Sickos." Fixed interest rate for life is what the offer said. Who died besides my father to change the "...fixed interest rate for life...?"
It is about time the credit card companies have guidelines to follow from the government. They have been out of control for years. It is only puzzling to me why it has taken so long? How did the credit card companies manage to be so unyielding and unfair without earlier intervention?
Sidney
I don't think this will do anything but help keep irresponsible borrowers' heads above water longer. Banks will typically remove over-limit fees and late charges as a courtesy if the card holder calls. America needs real reform on credit – No more sky's the limit borrowing capabilites; stringent policies that HELP borrowers payoff balances. Unfortunately, this won't happen since the largest banks are also the biggest lobbyists. Only a small percentage of Americans can demonstrate spending self-control and it's obvious, due to our current crisis, that government needs to pull back the reins and impose tighter borrowing limits. People need to be forced to spend within their means.
I feel what the president is doing is excellent, however, what about all of the utility companies? They charge a fee online and by phone to pay your bills (up to $5 fee). We are being told that this fees will show up on the following month's bill in some cases, and some of these fees are being collect at the time you pay the bill.
What will be done for the fee being charged at the ATM machines. I had to make a $13 purchase one day, and I discovered that I did not have any money. I walked over to a Bank, and was charged a $3 fee to get $13.
What can we do as Americans to lower or over-turn these fees?
Much as we need credit card reform, we have more to fear from the gun lobby. Guns in our national parks? I want protection from the gun lobby.
In my home state of Minnesota we have a law that says a firearm cannot be discharged within 500 feet of an occupied building, unless you are on your own property. So if I have a neighbor 10 feet away he can shoot. My right to equal protection under the law is negated. I too should have the right to have no discharge of firearms within 500 feet of my home – no exceptions.
We do not need guns in our national parks any more than we need guns in our schools or our churches or our libraries or our public buildings. I want equal protection under the law.
Stop the gun lobby from taking away my rights under the guise of "right to bear arms".
To Whom It May Concern:
Re: Credit Card reform. In my opinion, it will not help anyone. As an example, yesterday I received notice from my credit card company – that the following will be taking place:
1. Effective July 2, 2009 my "purchasing rate" will become a promotional rate.
2 As of April 2010, balances subject to the Purchase rate will increase to 17.9% (0.4904% daily periodic rate). Mine is high at 7.9% now.
3. If you decline these changes, you will not be able to use your card and will forfiet any rewards (I don't subscribe to them).
4. "Also, once you decline these changes, you will not be able to reopen your account. It will be permnantly closed."
Now,keep in mind that I have been with them for over 10 years, if not longer, have never misssed a payment, and keep my average balance in the $800-$1,000 area consistently.
Therefore, it seems that they are punishing everyone before the new credit bill goes into account.
I am sure that our Senators & Representatives know nothing about this (Right!!!) even though they take their money and enjoy the perks they are given by these companies.
I am one person who won't be using their credit card again. Hutch
as a nine year survivor of stage 2 breast cancer i am in favor of this child receiving the chemo that the docs have said will give him a 95% chance of being cured
It's time someone stopped the credit card companies. I've had a sterling credit history and score for the past 20 years with a score in excess of 750 from all three agencies. I had a credit card with a fairly large balance that had a 12% intrest rate. I received an offer from {company} to transfer the balance and get a 3.99% interest rate for the life of the balance. 2 months ago one of my arrived 2 days late and they upped my interest rate on the lone to 15.99%. Although I was able to get them to roll it back to 10.99% I still feel as though I was ripped off by {co.}. The CC providors have too much power and should be stopped. Hooray President Obama!
CREDIT CARD SHARKING, CALL IT WHAT IT IS. I STARTED WITH A 3000.00 DOLLAR CREDIT CARD, WITH {company}. I NEVER MISSED A PAYMENT,THE BILL WENT FROM 79.00 A MONTH TO 150.00, I CALLED THEM AND EXPLAINED I COULD'NT PAY THAT MUCH AND SENT 100.00 A MONTH. THE PAYMENT SHOT TO 215.00, THEN {2nd company} TOOK OVER,AND THE PAYMENT WENT TO 298.00. THEN 388.00 IT'S LOAN SHARKING, PURE AND SIMPLE. THEN WE BAILED THEM OUT. I PAID OFF THIS LOAN, AND WHEN I CALLED THEM TO LET THEM KNOW THE LOAN WAS PAID IN FULL. I WAS TREATED VERY BAD, THEN THEY TOLD ME THAT THEY HAD ALREADY CANCELED MY ACCOUNT. BECAUSE I WAS A BAD RISK.
THEY HAVE US SCARED STIFF ABOUT OUR CREDIT RATING WHEN IT COMES TO LOANS, WELL IT'S ABOUT TIME ALL OF US SEND IN CREDIT RATINGS ON ALL BANKS AND CREDIT CARD COMPANIES BEFORE WE LOAN ANY MORE MONEY. IT'S OUR MONEY AND WE SHOULD HAVE A SAY IN THE MATTER, ACCORDING TO THERE CREDIT RATING. COME ON AMERICA, WE'RE UNDER ATACK. THEY BETTER NOT BE LATE ON PAYING US BACK, OR MISSING A PAYMENT FOR ANY REASON. OR THE PRICE WILL GO UP.
WELL THIS MORNING PRESIDENT OBAMA SIGNED SIGNED THE CREDIT CARD BILL, YES IT WILL TAKE A YEAR. BUT HE IS THE ONLY PRESIDENT, THAT IS TRYING. LETS ALL GET BEHIND HIM AND PUSH HIM TO THE GOUL LINE BEFORE THE OTHERS TACKLE AND TIES HIS HANDS, LIKE THE OTHERS. I AGREE THERE IS NO EXCUSE FOR OVER SPENDING,AND IRRESPONDSABLITY IN HANDING THERE BILLS. YOU HERE THAT BANKS AND CREDIT CARD COMPANIES. WE MAKE IT PLAIN AND SIMPLE, THAT ALL CAN READ. AND WE DON'T WANT TAG ONS, OR ANY MORE FINE PRINT. TO GET IT DONE.
I was glad to see SOS Clinton responding to the crisis in Pakistan. The number of refugees and homeless doubled twice in the space of seven days to 2 million people. A total crisis exploding in the Pakistan countryside. These people just barely have their heads above water. I'm sure they'd love to buy someone a car to get a little HELP. I'm sure, in other words, they'd give everything they have. They shouldn't have to, that's a dire situation. We need to help them. There's a good argument that we caused some of their problems. I'm going to see if I can make a donation online.
Don't the credit card companies call people up and work out payment arrangements, give reminders, help with accounts in general? The process is already here to work these things out. So why not work things out now? The new rules give the card holder additional flexibility.
The mindset in liberal cities like NYC, which incorporates only five counties in the entire state, unfortunately control the politics in Albany. For too long, the city has abused and further restricted the fundamental second amendment rights of licensed gun owners especially in its city. I will revele in the passage of the Senate bill which will compel the state and city of New York to amend its archaic gun laws. This state must come up to speed with the majority of the country in the reciprocity issue and cease violating citizens fundamental rights under our second amendment.