June 22,2009
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Who are you kidding?, Pt.1
Credit card cons.By now, probably nearly all credit card holders know about the passage of the "Credit Card Accountability, Responsibility and Disclosure Act (CCARDA) which passed so overwhelmingly in Congress last month. After years of turmoil, Senator Dodd (D-Conn) finally came through with his baby. It's also reasonable to assume that many of these credit card holders have felt the back-lash of the whip. The reaction from the card industry has been brutal (just as they promised.)
Two wise and insightful Op-Ed Contributors out of Cambridge, MA have hit the nail right on the head to sort out the confusion. The credit card industry, it seems, has forewarned and then justified their actions of denying credit, reducing limits, jacking interest and tacking on every kind of new fee they could dream up to raise revenue. They claim that they can't make ends meet otherwise. Now that the most comprehensive credit card consumer protection is in place (though not being enforced yet), the industry claims they used the extra monies from tricking customers and wielding surprise changes was needed to provide perks for their favored card holders. Senator Dobb's new bill is putting a stop to most of these practices.
Ryan Bubb and Alex Kaufman point out that there is a sector within the credit card industry that remains unaffected by all this turmoil. Credit Unions seem to be doing just fine. Since they have not found the need to deceive their card holders, they are, pretty-much, immune the "restrictive changes' brought about in Sen. Dodd's bill.
The credit unions are not complaining, nor are they retaliating against the new regs. They seem to be doing just fine with the new rules and haven't felt much of a change. What makes them different and how can they do what the major credit card lenders can't?