Having Failed to Contain Foreclosures, Congress is Now Targeting Exorbitant Credit Card Fees

Posted on June 10, 2009
Filed Under Foreclosure Homes | Leave a Comment

Having failed to contain foreclosed homes, Congress is now targeting exorbitant credit card fees. The legislators are trying to compensate their failure to the public by putting a ban on arbitrary hiking of rates and fees by the credit card firms. It is hoped that the required legislation will be passed on Tuesday 19th May by the Senate. The House has already given the nod to a similar step. The Democrats are optimistic about the president giving his final seal to it.

With its finalization the credit card group would be expected to change their business ways by nine months. The lenders would be required to post their agreements on the net, allow customers to make payments online or via phone without levying charges. Customers will have to be notified 45 days before any interest rates are hiked.

One of the most important provisions in the bill is about “universal default.” The rate of an existing balance cannot be increased unless the borrower is 60 days lagging behind in payment. After six months, even after this, the credit card company will have to return to the previous rate if the consumer manages to repay timely the minimum balance.

The lending lobby is not taking this attack on a new front lying low. They are complaining that this will choke credit at a time when the people need it the most. They are defending themselves that rates and fees have to be high because this is the only way lenders can protect themselves when in this type of loan there is no security or promise about returning money.

The Congress is concerned about facing the voters in 2010. They have to show solid proof that they have been working to rescue their constituents from crushing debts. The lawmakers are saying that the credit card companies have overstepped their limits. The leader of the majority in the Senate, Harry Reid (Democrat) said, “Any effort to restore confidence in our economy must start not on Wall Street, but in Main Street, and that’s what the credit card situation is all about. It’s about Main Street.”

President Obama is concerned about this matter. In a recent town hall meeting he opined that while free flow of credit is vital the government cannot put up with profits made by confusing working people. He said, “This is America and we don’t begrudge a company’s success when that success is based on honest dealings with consumers. We need reform to restore some sense of balance.”

Search Foreclosed Homes by Top Cities

• Seattle Foreclosed Homes
• Detroit Foreclosed Homes
• Macomb Foreclosed Homes
• Chicago Foreclosed Homes
• San Diego Foreclosed Homes

Popularity: 3% [?]

Comments