WSJ: Credit card companies skirt new legislation by replacing old fees with new ones

[Amerigo Vespucci]

JULY 31, 2010

The New Credit-Card Tricks
Just months after historic legislation banned certain billing practices, card issuers have dreamed up new ones designed to trip up consumers.

By JESSICA SILVER-GREENBERG



http://online.wsj.com/article/SB10001424052748704895004575395823497473064.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsForth

Whomever President Barack Obama taps to head the new Bureau of Consumer Financial Protection could find it difficult to keep ahead of the credit-card industry.

The Credit Card Accountability Responsibility and Disclosure Act of 2009, known as the Card Act, was intended to reshape the contours of consumer finance. Among other things, it forces card issuers to give customers more notice about interest-rate increases and restricts certain controversial billing practices such as inactivity fees.

Yet some of the biggest card issuers in the U.S., including Citigroup Inc., J.P. Morgan Chase & Co. and Discover Financial Services, are already rolling out a slew of fees designed to recapture some of their lost income, in part by skirting the new rules. Some banks may even be violating the law outright, say consumer advocates.

"Card companies are figuring out how to replace old fees with new ones," says Victor Stango, an associate economist with the Federal Reserve Bank of Chicago and a professor at the University of California, Davis, who has been analyzing how the Card Act will affect consumer banking. "It's a race between regulators writing ever-more-complex laws and credit-card companies setting up ever-more-complex fees."

[Upsideout]

1. New fees

*Shock*

[Mariana]

9. My reaction exactly.

Imagine that.

Welcome!:party:

[katandmoon]

2. Yeah, who didn't see this coming?

[DJ13]

4. Obama

:shrug:

[katandmoon]

6. He did, they all did. They're not stupid. They just think we are.

[Rage for Order]

7. I'm caught completely off-guard by these developments

I assumed the credit card companies would play fairly going forward. I'm so shocked!

[DJ13]

3. I've read Warren's articles (from 3 years ago) about CC practices

The PTB dont want her in charge because she knows all their tricks.

[Greyhound]

5. But, but, but..."Nobody could've predicted..."

You just can't fix stupid.:eyes:

[The Magistrate]

8. Nor, Sir, Can You Really Regulate Crooks

Honest men will not need regulations to do right, crooks will simply try and find a way around any regulation in detail.

What is necessary is to restore usury laws, ban outright any charge beyond interest on the loan, and make the law of the state in which the person receiving credit resides binding on the transaction, wherever the business issuing the credit is located.

[Greyhound]

11. Too true, but we live in a world run by and for crooks.

It is become so bad that we now have debates on how much theft and corruption is acceptable because "nobody's perfect".

Another requirement to regulation is their enforcement and that is another very large issue that is rarely spoken of.

People often ask me why I'm so cynical and I can only reply that it is because I've been very privileged to see every part of this nation from both near the top and near the bottom. It has been educational, inspiring, and very depressing. We are still a nation of generally well meaning, good hearted, people with the potential to move the entire world toward any of several utopias, but we are hobbled by parasites in every area of endeavor. And these parasites are adept at using the very characteristics of Americans to turn them against each other and away from the parasites that benefit from the disease they inflict.

Sorry, went a bit astray there. We need laws, not regulations as regulations are too easily altered, that set absolute standards. This at least gives people the grounds from which to fight for what they believe is right.

[Selatius]

17. I'm afraid any sitting leader who do what you recommend would be assassinated.

You're going up against people who run empires and can crash economies if they wanted it. They control hundreds of billions of dollars worth of assets. They will not give up that kind of power without a war.

[The Magistrate]

19. Governments, Sir, Need To Remember They Wield The Axe And Rod

They also need to remember the ancient knowledge that the merchant is the enemy of social order and tranquility. There is a reason merchants were rated among the 'despised occupations' in Confucian China, along with prostitutes and actors and such....

[xchrom]

10. How many senators do you think are old enough

To remember a financially successful America WITH
Things like usuary laws in place?

How many have a history book available
Who aren't?

Corporate corruption the gift that keeps on giving - to
The People right in the ass.

[dmallind]

12. And I'll avoid those same as I did the old ones with my super secret method

otherwise known as paying my debts on time.

[BlueIris]

13. UGLY.

I can't believe I just committed to getting a new card. Le sigh...

[dkf]

14. Are we surprised?

Our financial companies are infected with enronitis.

[jimlup]

15. A coworker's son is a math genius

He is paid big bucks to come up with schemes for the financial companies.

[KharmaTrain]

16. He'll Always Have A Job...

This is a game of whack-a-mole. Congress will hesitantly come up with new regulations then give the banksters and card companies time to come up with ways to skirt the new laws.

These fees were to be expected as we're only getting token regulation...some good things that can be circumvented. The big money always wins.

[Ruby the Liberal]

18. We need Liz Warren in her new role yesterday.

[laughingliberal]

20. +1000 nt