Feds Push For Simpler Credit Card Mailings!
Confused by the fees and terms of your credit card? The Federal Reserve wants to make your monthly bill and solicitations that arrive in your mailbox easier to understand.
The Fed wants companies to give people 45 days’ notice before making any changes to the terms of an account, including slapping on a higher penalty rate for missing payments or paying bills late.
Under current regulations, credit card companies in most cases provide 15 days’ notice before making certain changes to the terms of an account, the Fed said. However, under current regulations creditors need not inform a consumer in advance if the interest rate to an account increases due to default or delinquency.
The extra time would give people an opportunity to pursue their options, including switching to another credit card provider.
“The goal of the proposed revisions is to make sure that consumers get key information about credit card terms in a clear and conspicuous format and at a time when it would be most useful to them,” Fed Chairman Ben Bernanke explained Wednesday.
The Fed’s proposal would call for a table summarizing the changes to appear on the statement above the list of the consumers’ transactions. That’s where people are most likely to notice the changes, the Fed said.
From solicitations to monthly statements, the Fed’s proposal would require key information appear in larger print, with rates and fees in an easier-to-see boldface.
December 5th, 2008 at 7:43 am
Since the US has a government for the people, by the people and of the people, then the PEOPLE should benefit from the credit bailout especially if the government is using our hard-earned dollars to pay Citi’s and the credit industry’s ANTI-PEOPLE practices. The bail-out should impose major reforms on credit practices NOW. Here are some suggestions:
1) cap credit card annual interest rates to match mortgage 30-yr interest rates.
2) cap rate increases to no more than 2% over the life of ownership of a credit card.
3) cap non-payment or late-payment penalty fees to the greater of $10 or 0.1% of PAST DUE balance (only)
4) disallow charging of interest on all credit card purchases less than one month old.
5) following a non-payment or late payment by credit card user, disallow charging of interest on any purchase less than one month old.
6) disallow rate increases unless a credit card user provides written authorization to do so.
7) disallow credit card industry practice of issuing credit cards to individuals having a debt to earnings/assets/net worth ratio (or obligations to earnings/assets/net worth ratio) greater than 30%
8) disallow credit industry practice of approving loans to businesses with debt to earnings/assets/net worth ratio greater than 40%
9) cap mortgage and loan interest rate increases to no more than 2% over the life of the loan and only with written consent of borrower
10) allow businesses and individuals to pay off loans sooner by applying a larger portion of each payment to the prinicipal balance due on a loan. This is done by stopping use of the current formula used to calculate interest due on loans, mortgages and credit cards. New formula: based on an initial loan value, calculate the amount of interest due based upon the agreed to interest rate and agreed to number of payments, then divide the total interest amount by the number of payments to be made, then charge the portion of interest and portion of principal due for each payment.
November 11th, 2010 at 9:47 pm