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Obama does another good thing
Topic Started: Apr 24 2009, 02:40 AM (536 Views)
Mikhailoh
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If you want trouble, find yourself a redhead
I personally think this is a good thing. The credit card companies have become, IMO, greedy and predatory. Bravo, Mr. Obama. This is a campaign promise he is fulfilling. From Bloomberg.

Quote:
 
Obama Warns Credit Card Companies New Regulations Are Coming

By Roger Runningen and Julianna Goldman


April 24 (Bloomberg) -- President Barack Obama warned credit-card issuers they will face new regulations and scrutiny to keep consumers from being hit by “unfair” rate increases and abusive fees and penalties.

Obama said he told 13 executives from the industry, including representatives from Charlotte, North Carolina-based Bank of America Corp. and New York-based American Express Co. that while credit cards are an important source of finance for families and small businesses, consumers too often must negotiate confusing terms that end up costing them more money than they expected.

“The days of any time, any reason rate hikes and late fee traps have to end,” Obama said after meeting with the executives yesterday at the White House. “No more fine print, no more confusing terms and conditions.”

Card issuers are under fire for policies that impose large late fees and boost interest rates on delinquent customers amid higher unemployment and a recession. The Federal Reserve already has issued new rules, due to take effect in 2010. Lawmakers in the House and Senate also are considering legislation to provide more consumer protections.

American Bankers Association President Ed Yingling, who was among those at the meeting, said afterward that Obama was “very clear” about his desire to make disclosures easier to understand and about the practices he wants ended.

Finding a Balance

Obama and the industry executives discussed striking a balance between “the right consumer protections without undermining the availability of credit, particularly at this time when there’s already credit problems in the industry,” Yingling said.

Obama said he is “confident that we can arrive at something that is commonsensical” that permits the industry to thrive while providing credit to consumers and businesses. He said he directed his economic team to work with Congress on the legislation.

He demanded that credit-card issuers “eliminate some of the abuse” in the industry, citing sudden rate increases on cards and changes in fees. According to figures released by the administration, about a fifth of consumers carrying credit card debt are paying an interest rate of more than 20 percent.

Obama also called on credit-card companies to make available “a plain-vanilla” account with simple terms.

‘Clarity and Transparency’

“We want clarity and transparency from here on out,” Obama told reporters after the meeting ended.

The president said he delivered a warning to card issuers that companies that violate consumer protections “will feel the weight of the law.”

Before the White House meeting began, Senate Banking Committee Chairman Christopher Dodd and Senator Charles Schumer released a letter requesting that the Federal Reserve implement its rules immediately rather than waiting until 2010.

“Credit-card providers have been aggressively raising rates on consumers now to avoid the ramifications of this rule when it goes into effect next year,” Dodd, a Connecticut Democrat, and Schumer, a New York Democrat, wrote.

The central bank adopted rules in December that limit rate increases on existing balances and require lenders to give consumers a reasonable time to pay. The National Credit Union Administration and the Office of Thrift Supervision adopted the same standards.

House Legislation

The House Financial Services Committee approved its version of a credit-card “bill of rights” this week that would impose broader restrictions than the Fed limits and take effect as soon as the legislation is signed into law.

The House may vote on the bill as soon as April 30, Representative Carolyn Maloney, a New York Democrat who is a member of the panel, said today at the Capitol. She said final legislation may clear the House and Senate this year.

“We believe, with President Obama’s strong support, we can do it,” she said.

Republican National Committee Chairman accused Obama of “hypocrisy” for criticizing credit-card companies “when his own reckless spending and borrowing is piling debt onto the federal government’s credit card.”

The bankers association has warned the requirements may raise costs and limit the credit availability as banks already are reeling from the recession and the credit crunch.

Delinquent Accounts

At Bank of America, the largest U.S. lender by assets, 7.8 percent of credit-card accounts were delinquent in February by more than 30 days, according to Bloomberg data. That’s up from 5.9 percent last August. Delinquencies are jumping throughout the industry in tandem with unemployment, which reached a 25- year high of 8.5 percent in March.

Charge-offs, which are loans that banks don’t expect to be repaid, increased to an average of 8.02 percent in February from 4.53 percent a year earlier.

“We’re going to have a lot of discussions about the details and that will be difficult,” Yingling said, “but I think everybody’s committed to” finding a resolution.

Obama indicated that the Fed rules were a starting point “and then we look for gaps that the president and members of Congress think need to be filled,” he said. “We’ll work with them to address some of those gaps.”

White House press secretary Robert Gibbs said the industry representatives made the case that “what the Fed is doing is probably enough,” while the president believes there are “things that must be done above and beyond what the Fed has proposed.”

Also at the meeting were Treasury Secretary Timothy Geithner, Obama economic advisers Lawrence Summers and Christina Romer and senior adviser Valerie Jarrett.

The industry was represented by executives from 13 companies, including Barclays Plc, JPMorgan Chase & Co, Capital One Financial Corp., Citigroup Inc., Discover Financial Services, HSBC Holdings Plc, U.S. Bancorp, USAA Federal Savings Bank, Wells Fargo & Co., Visa Inc. and MasterCard Inc.


Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball
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Frank_W
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Resident Misanthrope
Outstanding. :clap: Credit where credit is due. (Without a whopping 23% interest rate) ;)
Anatomy Prof: "The human body has about 20 sq. meters of skin."
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Mikhailoh
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If you want trouble, find yourself a redhead
I'm all for deregulation, but it has to be coupled with a sense of responsibility. When it isn't, back comes regulation, and rightfully so.
Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball
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QuirtEvans
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I Owe It All To John D'Oh
The bankers are fighting tooth and nail against this. Watch who champions their side in Congress.
It would be unwise to underestimate what large groups of ill-informed people acting together can achieve. -- John D'Oh, January 14, 2010.
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Mikhailoh
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If you want trouble, find yourself a redhead
The problem I have with the GOP here is they are using this needed effort to score points about the rising national debt. The two are not related in any actionable way, and linking them is specious.

My party sure seems to have lost their way. Both parties, actually.
Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball
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Frank_W
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Resident Misanthrope
Welcome to the Centrist party, Mik. That's both a good and bad thing. :tongue:
Anatomy Prof: "The human body has about 20 sq. meters of skin."
Me: "Man, that's a lot of lampshades!"
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Pianolicious
Senior Carp
Credit cards are so evil these days. I've cut up all but a few and closed them and don't charge unless I know I can pay them off immediately.

Part of the reason for this recession IMHO is that the word is getting out to the rank and file voter that banks WANT TO trap you and keep you their prisoner. People may be gullible, but when they get bit a few times they usually change their ways.
Sit tibi vita longa et omnia bona!!! -- Dr. Spock
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John D'Oh
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MAMIL
The really bad thing about the centrist party is that it doesn't exist.
What do you mean "we", have you got a mouse in your pocket?
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Frank_W
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Resident Misanthrope
John D'Oh
Apr 24 2009, 05:36 AM
The really bad thing about the centrist party is that it doesn't exist.
Indeed...

I could probably join the Libertarian party, if they'd let go of some of the more offbeat policies that make them sound like a bunch of whack-jobs.

The income tax isn't going away. Shut up about it.
Marijuana is not going to become federally legalized. Shut up about it.

The more I learn about politics and politicians, the more I think they are all just scumbags, and if it didn't have any bearing on my life, I wouldn't care, at all.

Purchasing a hundred acres in New Mexico, putting a 12' fence around it, and building a house right in the middle of it, is increasingly appealing.
Anatomy Prof: "The human body has about 20 sq. meters of skin."
Me: "Man, that's a lot of lampshades!"
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Mikhailoh
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If you want trouble, find yourself a redhead
I would not count on marijuana, perhaps other drugs as well, not being legalized. The drug war has come to our border and this might be one very effective way to stop it.
Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball
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Frank_W
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Resident Misanthrope
Maybe... But to make it part of your party's platform alienates a massive sector of voters who apparently think "Reefer Madness" was a true-to-life documentary.
Anatomy Prof: "The human body has about 20 sq. meters of skin."
Me: "Man, that's a lot of lampshades!"
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Mikhailoh
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If you want trouble, find yourself a redhead
It's not true? :doh:
Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball
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Frank_W
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:lol2:
Anatomy Prof: "The human body has about 20 sq. meters of skin."
Me: "Man, that's a lot of lampshades!"
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big al
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Bull-Carp
I think I've gotten changes on most credit cards I possess (one department store doesn't seem to have done anything lately; maybe they're just slower than the rest). I haven't changed my pattern of paying in full every month and I've been at the same employer for about 10 years and address for 26 years. One card cut my credit limit in half. It's of no practical importance to me because I seldom use more than 5% of the previous limit on that card and it had risen to a ridiculous level, but the principle of the thing still annoyed me.

Big Al
Location: Western PA

"jesu, der simcha fun der man's farlangen."
-bachophile
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Mark
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HOLY CARP!!!
Quote:
 
The income tax isn't going away. Shut up about it.


LIES! :weeping:
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Frank_W
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Resident Misanthrope
Do you REALLY think the income tax will ever be rescinded or abolished? I'm not any fonder of it than you are, but being radical isn't ever going to garner the Libertarians a legitimate number of voters to mount a serious campaign. They need to drop the more radical bits and see about appealing to the broader base of disenfranchised, nonpartisan crowd.
Anatomy Prof: "The human body has about 20 sq. meters of skin."
Me: "Man, that's a lot of lampshades!"
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Mikhailoh
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If you want trouble, find yourself a redhead
It will just be replaced by something every bit as onerous.
Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball
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Mark
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HOLY CARP!!!
The income tax is what is radical my friend. The fact that those in power have effectively brainwashed the public into believing that it is both necessary and "patriotic" have done a great job. It is neither.

It is one of the most unpatriotic things just this side of blind worship of all things government.

Getting rid of it is sanity.

And Mik, it should not be replaced with anything.

If we would simply stop electing the different sides of the same coin it could be repealed.
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Frank_W
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Should, should, should, should, should....

The income tax IS. Yes, it should probably be abolished. Will it? Probably not.

:shrug:
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Me: "Man, that's a lot of lampshades!"
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John D'Oh
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MAMIL
There shouldn't be wars, famine, drug abuse, mental illness and construction work on the I-95 on may way home from freaking work every day, either. All of these things worry me more than income tax.

Life's a bitch, and then you die.
What do you mean "we", have you got a mouse in your pocket?
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1hp
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Fulla-Carp

Yes, I though the issue with credit cards was a worthy battle. However I am not confident that Obama can really effect change - very hard to write and pass legislature that will do exactly as you planned. The banks will find a way around it. Credit card interest is big profit for banks - the only way to fix this is for the US to reduce the amount of loans on credit cards, which would have the effect of making the banks more competitive (reduce demand with an over supply). Not going to happen, so at this point it's all in the banks favour.

Al, your problem is that you don't exercise your card credit enough. Strange as it sounds there are people on the edge of financial ruin who probably have better credit limits than you, largely because they have regularly exercised their cards.
There are 10 kinds of people in this world, those that understand binary and................
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Mark
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HOLY CARP!!!
John D'Oh
Apr 24 2009, 08:49 AM
There shouldn't be wars, famine, drug abuse, mental illness and construction work on the I-95 on may way home from freaking work every day, either. All of these things worry me more than income tax.

Life's a bitch, and then you die.
It's plain to see that you simply have your priorities mixed up. :P

Actually life is pretty friggin cool.

It can be a bitch but over all it is not.

And then you die.
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When I see an adult on a bicycle, I do not despair for the future of the human race. H.G. Wells
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Pianolicious
Senior Carp
How come when I give Obie the benefit of the doubt I'm an apologist and when you do it's this big touchy feely feel-good love-in?
Sit tibi vita longa et omnia bona!!! -- Dr. Spock
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Mikhailoh
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If you want trouble, find yourself a redhead
You give him the benefit of the doubt on the dumb sh!t he does. :lol:
Once in his life, every man is entitled to fall madly in love with a gorgeous redhead - Lucille Ball
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Jolly
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Geaux Tigers!
Yep, Obie gets a gold star on this one...
The main obstacle to a stable and just world order is the United States.- George Soros
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