December 17, 2008

• News:  A Fair Credit Card System.

  What will Mr. Bernanke's "new baseline for fairness" offer us? As the Federal Reserve chief releases new credit card regulations tomorrow (Thursday), how effective will this ‘new deal' be? We won't have all the answers tomorrow, certainly, as full implementation and compliance aren't required to be enforced until some time in 2010. The reason things are moving so fast right now is an immediacy promulgated by, not only the crisis, but also a massive outcry of 60,000 credit card holders complaining to our government about unfair practices. Congress is addressing this problem very seriously and has given warning to the Treasury Dept. that if they don't act on the credit card problem both soon and effectively, that the Congress, themselves, will.

  • Some of the credit card abuses being addressed are:
    Raising interest rates on preexisting credit card debt.
  • Raising interest rates without sufficient reason or warning.
  • Extending duration of grace before default status can be declared.
  • Prohibiting rates hikes over defaults not related to the credit card industry.
  • More clarity and openness on issues of potential impact (fine print and asterisks).

  Usury tactics tend to be sticky business and the government has generally been shy of getting involved in this area. But now, extremes have gotten to the point of public outcry concerning credit cards. So much harm has been done to our nation from the corruption imbedded within government regulators that we're crumbling from government complacency. Finally, a democratic Congress has gained enough clout to step into it aggressively. When they tried to tend to the housing market abuses, they were stifled by a strong republican presence in Congress and had to stand by helplessly and watch it all happen.

  Finally, the vast majority of Americans have been slammed so hard against the ropes that they've united to demand change. Certainly, the credit card industry are the lesser of the problems because, if the republicans had protected our nation's job market and not shunned their obligations, our credit card problems would have been minimized. But, because the Bush administration stood by and willingly allowed millions of good paying jobs to leave our country, now even the little issues matter a lot.

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