24 April 2009
Fixing Retail Credit
I have the following suggestions regarding proposed changes to retail
credit policies:
- Structure existing and future retail credit card terms and conditions as contract law.
- Reinstate a federal usury law and modify the Bankruptcy Act accordingly.
- Institute a separate, graduated income tax rate on gross income from fees and financingcharges from retail credit operations.
- Create a new office for an enhanced compliance audits for bank examiners.
- Create an Omsbudsperson Office within the oversight federal agency.
Please send your own comments and suggestions to President Obama and to your Congressional representatives. I don't understand why the just passed legislation that changes how issuers extend or withdraw retail credit until July 2010. The industry pleaded for the extra time to comply because of the effort they have to make in response to the new requirements.
Well, it certainly does not take the banks that long to change interest rates and fees charged for various transactions. Terms can be changed with a single entry on an individual's account by the customer service representative on the phone. Need to change the payment due date? Just tell them the day of the month to set for your account. Do they think you are overextended beyond your ability to meet your monthly debt payment obligations? One data entry generates a letter to the customer and makes the change effective 45 days after receipt of that letter. Does anyone else find that their hard copy letters from Bank of America's customer service are not dated?
If you do not accept their changes to the Terms and Conditions of your credit agreement, then the issuer will restore your prior interest rate until that day's balance has been paid off and no additional charges are put onto the account--by you. They will still assess fees and financing charges on the unpaid balance until there is no longer a balance. The time period allowed to pay off the balance can be as long as a year.
If a bank credit card issuer can do all of that with a single phone call, why do the issuers need a year to make changes mandated by the new federal law? They must have gone to the same MBA courses that the management of General Motors attended.
Bullocks!
Labels: banks, consumer credit, credit cards, federal regulation, retail, usury
<< Home
