Wednesday, April 23, 2008

The Loan-Shark Industry

A few months ago, Rep. Carolyn B. Maloney introduced the Credit Cardholders' Bill of Rights Act of 2008 (H.R. 5244). The proposed legislation, co-sponsored by Rep. Barney Frank, D-Mass., chairman of the Financial Services Committee calls for badly needed comprehensive credit card reform.

The bill establishes the following rights for credit card holders:

  • Cardholders will not be subjected to arbitrary interest rate increases.
  • Cardholders who pay on time will not be penalized unfairly.
  • Cardholders will not be subjected to due date gimmicks.
  • Cardholders will be shielded from misleading terms.
  • Cardholders may set their own limits on their credit.
  • Card companies will credit and allocate payments fairly.
  • Card companies will not impose excessive fees on cardholders.
  • Card companies will not issue subprime credit cards to people who cannot afford them.
As it stands, credit-card companies are loan-shark companies, maybe even worse. Loan-sharks may break your legs if you don't pay up, however they make that clear from the beginning. Loan-shark companies, on the other hand, dress up the terms making it appear you are getting a great deal and then, sometimes even if you follow the terms, they break your legs anyway. As long as the "loan-shark" industry is allowed to operate free of regulation, "we the people" don't stand a chance.
“The playing field between card companies and cardholders has become very one-sided in recent years. Yet, more and more Americans are turning to their credit cards to help pay bills, buy groceries, and make ends meet in this troubled economy. Instead of looking the other way while Americans fall deeper into debt, Congress can and should take swift action to reform major credit card industry abuses and improve consumer protections for cardholders. The balanced reforms in this legislation will help do just that.” -- Rep. Carolyn B. Maloney


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