Senate Passes Credit Card Reform Bill
Hooray! 90-5, the Senate has passed the Credit Card Reform bill. The job now is to iron out the differences between it and the slightly weaker House bill, or for the House to approve the Senate bill. Either way, Obama has asked for legislators to send him a bill by Memorial Day. [Washington Post] (Photo: afagen)
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Wow. It must really be watered down to get 90 votes.
That or senators realized consumers are the ones that vote them into office.
I have a feeling the 2 South Dakota Senators objected to the amendment allowing guns in National Parks and recreation areas had something to do with those "Nay" votes.
Remember, the reason you vote "Nay" isn't always because you don't like the purpose of the bill.
I have a feeling this is going to come back to people who have good credit standing: “Those that manage their credit well will in some degree subsidize those that have credit problems.” .. http://bit.ly/3wQ2eL
Payday loan companies rejoice!
Minnesota only has one senator; and Senator Byrd is in the hospital. I don't know about the other three.
While we're at it we may as well simplify it so we can all read them, no?
@Drew5764: In before negative advert next election season proclaiming how the incumbent SD senators are on the side of the unfair credit practices.
And kitten drowning.
Eventually everyone will see how bad this will end up being for consumers. Anyway, stop using your credit card and you won't have to worry about fees and interest rates.
Sweet! And raise the rates for the rest of us who pay in full every time we use a card...and contract available credit.
Wait until people actually need credit again...theeeen we'll see what happens.
@Drew5764: South Dakota is a big credit card state (Citicards are headquartered there and employ lots of people). I'm actually surprised the Delaware senators voted yes.
I think this is good for consumers. I would be happier but I cut all my credit cards up over three years ago so I haven't had to deal with Credit Card company abuse per se.
This is not good, those of us who are responsible get screwed while bailing out those who aren't. It is just going to be some more fail.
@tonberry:
Go ahead and write the law that would provide the criteria for determining what may or may not be added to a bill. Good luck with that.
@bologna_wallet: Indeed, I'm surprised at the Delaware Senators also... including the one who's now our VP, when he fought so hard to change our bankruptcy laws... how quick we are to forget!
@veg-o-matic: Forgot to add, Kennedy's been voting Not Voting for practically the whole session, and the others have been doing so off and on as well, esp. Rockefeller.
Be careful what you wish for.
That being said, I don't see how this helps me, I pay my bill on time every month.
@Drew5764: I'd have a very hard time believing that. Although I haven't seen any specific statement from him, John Thune is incredibly "pro-gun."
I remember that his mailers during the 2004 campaign (I lived in a state adjacent to SD) featured a picture of him in full hunting gear, complete with the rifle across the shoulder.
@veg-o-matic: And Byrd was hospitalized for a spike in temperature.
That leaves Ensign. Was probably busy.
Wait,
So now I, a responsible person who pays off his card every month before accruing interest, will have to pay an annual fee to hold a credit card?
So, I have 2 options: Pay the fee and build my credit so I can hopefully someday buy a house, or
cut up my cards and have no credit
I appreciate their intentions, but I'm not sure its going to do anything, at least in the short term. They talk about how the point is to keep credit card companies from putting Americans even more deeper into debt. However, for those that already have balances, who are presumably at the most risk for going "deeper into debt," the bill does nothing. Its virtually a complete waste of time.
There is nothing currently stopping the credit card companies from doing what they are already doing, raising interests rates, plunging those people with balances "deeper into debt" because they are paying more and more each month in interest fees. These restrictions won't take affect until nine months after the bill is signed, at the earliest. Maybe that will be before July 2010, but maybe not, and at most will only be a few months earlier. Nothing stops the companies from raising rates, instituting yearly fees, raising late/overdrawn fees in the meantime that will then stick when the bill is finally signed. What was the point of this bill if at most it institutes these provisions only a month or two before the Federal Reserves' provisions? Why can't they make it effective 2 months after passage? That at least might (and I mean might) be worthwhile.
So fine for those that don't have balances, but those aren't the Americans at risk for going "deeper into debt" who are supposed to be protected by this bill. In fact, this may end up putting those people who are managing to pay their bills, but perhaps just barely because of the current economic conditions (like no raise/bonus for over a year while costs have increased) even more at risk for going "deeper into debt" or even defaulting.
@TEW: They were rushing back froma fact-finding mission to Thailand -- the other senators told them it was going to pass overwhelmingly anyway and not to hurry.
@hankrearden: Then what will happen is that responsible people will be approved and those who cannot afford the payments (not enough income, poor credit history, etc.) will be denied. Just the way the system was intended to work.
Credit card companies would like people to believe that this means no more credit for anyone ever. Just think though - how would they make money declining all credit requests? they'll approve those who are responsible and deny those who are not. That way it result in one less debt for the poor, who are often granted credit cards with exorbitant interest rates anyhow. Besides, most, if not all, credit unions and banks will gladly issue their members a credit card since they have the rest of your assets anyhow.
This is just the end for credit card companies being able to make up interest rate hikes and late fees. It's about time.
If you're still confused, liken an interest rate hike akin to your landlord raising the lease of your apartment despite having a 12 month lease (or contract). You'd be upset. For some reason, however, credit card companies have carte blanche on your money and like to violate their cardholder agreements without cause.
I find it hilarious that republicans were too afraid to vote no on this. They should have paper clipped health care to the bill.
I wonder how far this will drive up everyone's rate? I currently have 3 credit cards with rates lower than 9% (one as low as 7%). The 7% card has a limit of $15,000. I have been trying to get a home improvement loan of $6,000 with very little equity in my house (I bought it last year), and most banks want to lend it to me at 17% or higher. I wonder if banks will be forced to lower their unsecured interest rate now that credit card companies can't increase your interest rate on stuff you've already purchased?
@I Love New Jersey: Obviously you are trolling or don't understand the bill. You should actually read the bill and argue what specific points cause those who are responsible to "get screwed" as you so eloquently put it.
To those who complain that this is going to hurt them in some way: do you think we would be in quite the mess we are now with or without credit cards?
Living beyond your means is where most people are and there is something fundamentally wrong with that. Personally, I think we need a return to reality and paying with cash like our grandparents used to. That worked pretty well and they own their homes and are not saddled with perpetual debt like our parents (and we) are.
The complaints about annual fees are ridiculous. Free markets will still follow, people. This reform is not going to halt the concepts behind economic principles. Competition will still be there and companies will still offer no annual fee cards. They just won't offer them to people who are unfortunate hosts to their parasitic lending practices.
@veg-o-matic: Ohh, nevermind, here's his issue statement on guns. Specifically, that he likes concealed carry very much, and in national parks and refuges. He likely voted Nay because he did actually oppose the purpose of the bill.
@citking: The reduction of interest rates and re-introduction of annual fees is one. The reduction of the grace period is another. Politicians want to equalize the cost of credit so that the cheaper people pay for the more expensive people.
@HiV 2 Elway: Fail.
@Eyebrows McGee (popping ~May 29): Well, they've decided. But the National GOP organization has conspired to ensure that MN doesn't get their fair representation in the US Senate.
"Democracy" is a quaint, discarded notion to some, it seems.
@veg-o-matic: If they're so hot for concealed guns being allowed in national parks, they should attach another amendment saying that, if so, then concealed guns are also allowed in the US Senate building, by everyone including the tourists.
Sauce for the goose, sauce for the gander.
Why didn't 5 senators vote on this bill?