June 08, 2010
-
News: Duke On Financial Reform
Lawmakers continue to debate how best to meet the needs of credit cardholders across the U.S. as the Federal Reserve examines new legislation and determines the best way to protect consumers. Federal Board Governor Elizabeth Duke said there are five principles that she feels would best guide the industry and the Federal Reserve in serving the needs of both credit card companies and other credit providers as well as cardholders. Duke was speaking of enhanced consumer protection, prudent underwriting, transparency, easy to understand credit disclosures and retail mortgage contracts, and rules that limit competition while having a negative impact on credit cardholders and other credit seeking individuals. She believes that these principles have the potential to stimulate economic growth.
Duke is expected to outline her philosophy to members of the Consumer Bankers Association on Tuesday morning. Members of the association consists of banks, credit card companies, and other credit providing institutions that market a variety of financial products. These members control nearly two-thirds of the sector's total assets and earn over $18 billion a year. Financial reform has powered lawmakers in taking a closer look at the industry's policies, procedures, and practices which have aided consumers in becoming more and more rooted in credit card, loans, and mortgage debt. Also contributing to the aiding consumers, financial reform will place a greater responsibility on lenders in considering the borrower's ability to pay back debt.
The U.S. has recently begun the slow turn upwards as the nation pulls out of the worst recession since the Great Depression. On a positive side, credit card consumers appear to have learned a tuff lesson on financial responsibility and heath as they take a more careful look at acquiring debt. Meanwhile, it's easy to understand and most would be in agreement with Duke's assertion that the U.S. faces increased challenges in spurring economic growth after the average household net worth declined nearly 25 percent during the recession and unemployment grew to over 10 percent.