September 30, 2010
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News: Warren Takes Aim At CC Industry
Elizabeth Warren, one of the new appointees to the new Consumer Finance Protection Bureau which was established as a provision of the new CARD Act 2009, has her eye on the credit card industry. At the top of her to-do list, Ms Warren said she aims to bring more clarity to credit card terms and conditions. Although the new law mandates that lenders write terms and conditions that are clearer and in simpler language, Ms Warren believes that lenders have not yet fully complied with the provision. She believes that card contracts are misleading, confusing and unfair. Warren spoke earlier this month in a television interview about her commitment to ensuring that ordinary Americans are able to read and comprehend credit card agreement and know what they are getting into when they sign.
Ms Warren also met with bankers and made it clear that her intentions were to develop a program that would eliminate the "garbage" and work for both the credit card industry and the cardholder. She also spoke to the bankers on the consumer's view of the financial industry. According to Ms Warren, Americans feel alienated by the financial industry and believe their banks intend on working against them. The question is; will Warren be able to gain the credit cardholder's trust in knowing that she is on their side? Or, will Warren prove to be just another fast talking, self-serving political figure?
Credit card agreements were at the center of Warren's statements at the meeting. She addressed the grade level at which card agreements are written. Most card agreements are written at the 12th grade level whereas most Americans really only comprehend at the 6th grade level making it almost impossible for consumers to understand. Personally, I have a master's degree and have difficulty reading and understanding my card contracts. It sometimes pays to have your attorney, if you have one, to review your contract and explain it to you in simpler terms.