On April 23, 2009 Obama met with about 19 credit card and bank CEO’s about changing credit card policies toward consumers with high balances and high interest rates. Often times Obama will speak and sound as if he has the desire to help both businesses and consumers but I have found that when you unpack his words what he sounds like his is saying and what he is saying are two very different things. For some context you can visit White House Roll Call Pt.1 (Making Some Threats)
Obama’s words about transparency and the credit cards Terms and Agreements.
Number two, all the forms and statements that credit card companies send out have to be written in plain language and be in plain sight. No more fine print, no more confusing terms and conditions. We want clarity and transparency from here on out.
Obama apparently forgot that credit card companies are required by law to disclose everything about the credit card to potential customers and current customers. In fact when someone receives a credit card solicitation by mail there is the famous Charles Shumer box that is included in that solicitation:
The Schumer Box includes:
- Annual fee (if applicable)
- Annual Percentage Rate (APR) for purchases
- Other APRs (balance transfers, cash advances, default APRs)
- Grace period
- Finance calculation method
- Other transaction fees (such as balance transfers, cash advances, late payments, going over the agreed credit limit)
Is there anything that isn’t included in this list that Obama wants? Here’s what Schumer’s said for going to the Federal Reserve Board:
“”Consumers can’t shop around for credit card deals if they need a magnifying glass to find simple information concerning card rates and conditions,” said Schumer. “The Fed’s action today will ensure that consumers don’t have to go on a scavenger hunt to find out how much they’ll really be paying for their credit card purchases.”
Oh BTW, The Shumer Box came to pass in Sept. 2000. The “Schumer Box” provision, added to TILA under the Fair Credit and Credit Card Disclosure Act, requires all credit card solicitations to provide card terms and conditions in a “clear and conspicuous manner,” and in tabular form. I don’t agree much with Schumer but anytime you are borrowing money it is extremely important that the consumer know exactly what they are getting into before they sign on the dotted line. Just as, “ignorance of the law is no excuse for breaking the law.” then “ignorance from not reading the contract is no exuse for ignorance of the terms of that contract.”
What concerns me about Obama’s plan is that he was adament that the reason he voted against the Alive Infants Protection Act because there was already a law for that. Well duplicate laws may need to be signed because of the attrocities of consumers not knowing what they are getting into with their credit cards.
WHAT SAY YOU?
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