Senate Panel Approves Bill Limiting Credit-Card Rates

[girl gone mad]

The good news: the Senate has finally decided to put an end to some of the Credit Card industry's worst practices such as over limit fees and self-modifying contracts.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aEj6rf6ZYif8">Senate Panel Approves Bill Limiting Credit-Card Rates

March 31 (Bloomberg) -- A Senate panel approved new restrictions on credit-card interest rates that are broader than those adopted by the Federal Reserve in December, brushing aside objections from Republicans and the banking industry.

Senate Banking Committee Chairman Christopher Dodd said the measure was needed to protect consumers from having their interest rates raised on previous balances, unless certain conditions are met. The legislation would prevent credit-card companies from unilateral changes to the terms of an agreement.

The bill, known as the Credit Card Accountability, Responsibility and Disclosure Act, also would require the signature of a parent for a borrower under age 21, unless there’s proof of independent income or completion of a financial education course. Universities that forge marketing deals with card companies would be subject to the rule.

“The list of troubling credit-card practices is as lengthy as it is disturbing,” said Dodd, a Connecticut Democrat. The measure passed on a 12-11 vote, with all the panel’s Republicans opposing it. The bill now goes to the full Senate. The House Financial Services Committee has scheduled a vote on its version of the legislation tomorrow.

The bad news: they slipped a backdoor bank bailout provision into the measure.

The committee amended the bill to include new borrowing authority for the Federal Deposit Insurance Corp. Under the bill, the FDIC would be able to borrow up to $100 billion from the U.S. Treasury, an increase from $30 billion now. The FDIC has said the additional borrowing authority may reduce a special one-time fee imposed on banks to replenish the deposit insurance program.

Even with the amendment to funnel more money to failed banks, all in all I think this is progress!

[knowbody0]

1. we need to edge our way back to the old usuary rules

[Lasher]

3. We need to move more quickly than this.

But you're right, we need to get back to the old usury rules. The sooner the better.

We need way more credit card reform than that described in the OP. There are lots of people who should not have credit cards, regardless of the interest rate. And yet they have them. I can remember a time when this was not so prevalent.

[cliffordu]

5. That would be my ex-brother in law...during manic phases he thinks credit cards

are a license to pillage...

When he's not manic he's actually fairly responsible....

[The_Casual_Observer]

2. It's about time, the bastards have gone completely out of control.

The latest scam was to reduce your credit line & then raise your interest rate because of the resulting change of rating due to the change in your credit line.

[CoffeeCat]

4. Okayyyy....I'm bothered by the sneaky FDIC amendment...

They've got this big credit-card bill that will surely garner a great deal of media
attention. Big splash.

Tucked into this bill is a little amendment---that enables the FDIC to borrow up to $100 billion from
the U.S. Treasury, increasing the previous limit by $30 billion.

I remember that Sheila Bair, Chairman of the FDIC, announced a month ago, that the banks would be paying
fees to increase the FDIC's reserves... because the FDIC's reserves were low. The banks protested
like rabid monkeys. No way would they pay it.

This issue was important enough that this amendment was thrown in to shore up those reserves.

Something ain't right at the FDIC and I anticipate that the "powers that be" understand that many, many more
bank failures (which will stress the FDICs reserves) are coming down the pike. They've been working diligently
to solve the FDIC's potential shortfalls, and they finally found an answer. You don't work that hard on an issue
unless there's great concern.

Also, this amendment was quietly tucked in to this bill. It wasn't a standalone bill that would draw attention.
Shoring up the FDIC's coffers was done quietly.

Call me paranoid, but I see nothing but trouble in all of this...

[girl gone mad]

6. What isn't right is that Geithner's new PPIP plan exposes the FDIC..

to a massive amount of risk. This is putting a lot of pressure on the agency, which is already dealing with shortfalls.

[dixiegrrrrl]

8. U R correct.

FIDC is broke. And has announced this some months ago.

*******FDIC broke, asking for unlimited Treasury loans
Posted on October 1st, 2008 *********
http://blogofbile.com/2008/10/01/fdic-broke-asking-for-unlimited-treasury-loans/
and

FDIC warns US bank deposit insurance fund could tank..Mar. 5
http://news.yahoo.com/s/afp/20090305/bs_afp/financeeconomyusbankinggovernment

There are un-substantiated rumors the FDIC money has been spent by the Treasury on things Bush knew Congress would not approve of....like wars.

but a bigger problem remains.
Congress, says the Constitution ( that "quaint" document )
has the sole authority to authorize expenditures and appropriate money..and debt.
First Paulson and Bernanke, and now Geithner ( Paulson light) and Bernanke are pushing to give the Federal Reserve the power, removing what is left of oversight of spending from Congress.
And Treasury Dept with happily print all the money the Fed wants, as it has been doing for some time.

THAT is the sneaky dirty secret going on here.

[Hoopla Phil]

7. One of the REAL problems that needs to be fixed is

when the SOBs lower your credit limit to a level below your current balance. Then they tack on over limit fees. BASTARDS!!!!!!!!!!!!!!!!!!!