Consumers Union’s take on President Obama’s proposed financial product safety commission “When consumers decide to make a financial commitment, they need to understand the bottom line before they sign their name on the dotted line. This plan helps consumers cut through the clutter and make educated decisions about their finances” [Consumer Reports Money]

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  1. I Love New Jersey says:

    However when the government decides to make a financial commitment, they seem to ignore the bottom line before they sign their name on the dotted line.

    • bloggerX says:

      @I Love New Jersey: The facts of life!

    • MooseOfReason says:

      @H3ion: We don’t have either of those types of regulations on the Fed. They don’t have to disclose anything, and there are no substantive rules.

      If we’re going to place regulations on the financial industry, we need to treat the Fed the same way.

  2. bobert says:

    This is a big step in the right direction.

    I explored doing a mortgage refinance with Wachovia in 2006, and the phone sales rep gave me verbal assurances which I then verified: “Let me make absolutely sure. This refi will do X and Y and Z.” “Yes.”

    So I paid the $100 paperwork fee, got the paperwork, and none of X, Y, or Z were there. When I called Wachovia, they basically said, “Tough luck, that’s the deal we’re offering, and if you don’t like it, we keep your $100.”

    I immediately cancelled the refi, including the upcoming appraisal. They debited my checking account $550 for the appraisal the day after I cancelled it, and several days before the appraisal had been scheduled, and took their sweet time about returning it.

    We need a system where financial institutions have to tell you in plain English what you’re getting into, and have to guarantee to stand behind that, BEFORE you have to give them any money.

    If Obama’s manages to get that into law, I will hold a backyard barbecue in his honor.

    • sanjsrik says:

      @bobert:

      Any offers made verbally are null and void and unenforceable. This is the way they got so many people who trusted that (unlike you) didn’t read the paperwork they received.

      Good for you for reading what you were “promised”.

  3. H3ion says:

    Regulation is fine but the typical government approach to regulation has been disclosure rather than substantive rules. For example, if a credit card company intends to charge you 5,000% interest, if the regulation requires only disclosure they can disclose and then charge you 5,000% interest. I don’t know if Obama or the Congress has the political capital and guts to take on the financial services industry and actually regulate fees and impose a nationwide usury cap. Jury is out on this one.

  4. sanjsrik says:

    You know what will happen, there will be language in there that says that if it’s in a terms of service that anything they say is fine.

    The entire CARD act is null and void because of this same language and that the credit card companies are given almost a year to screw everyone with a new TOS.