Brittanyflowers™ Weblog

Credit Card Reform Act of 2008 – Amends the Fair Credit Reporting Act to permit a consumer reporting agency to furnish a consumer report in connection with any credit or insurance transaction that is not initiated by the consumer only if the report indicates that the consumer is age 21 or older. Allows 18-year olds to elect to have their name and address included in any agency list.

Amends the Truth in Lending Act to prohibit a credit card issuer from changing the terms of a credit card under an open end consumer credit plan: (1) before the scheduled contract expiration or renewal date; and (2) until the issuer has published all contract changes in any mandatory disclosures.

Establishes a cardholder right to repay all existing balances on a terminated or expired credit card account under the terms of the account in effect before the termination or expiration.

Imposes limits upon increases of interest rates and finance charges on a credit card account before its scheduled renewal date.

Permits an increase in the annual percentage rate (APR) as a penalty only for specific, material contract violations of a consumer directly related to the account that are specified in the contract as grounds for an increase.

Bans retroactive rate increases.

Prohibits a credit card issuer from imposing adverse consequences for late payment if the cardholder’s payment is postmarked or initiated by electronic funds transfer on or before the required postmark date.

Requires a credit card issuer to verify, when the account is opened or the credit limit increased, that the consumer will be able to make the scheduled payments, based on a consideration of current and expected income, current obligations, and employment status.

My thoughts:

Credit card debt is up, housing is down, and so Congress decides to go after the evil credit card companies? I’ve heard it said that the responsibility lies with the consumer who spends every dime he makes plus another 30% or so and I actually agree with this.

So the question is should fraudulent and deceptive practices of the banking industry be targeted? It’s a tough question.
In this crazy financial upheaval,  I have talked to so many people,  all with the same stories, the banks calling their lines of credit & loans due, credit card companies raising the interest from  9% to 32 % , the list goes on & on. I own a small business, and I extend credit to all of many of my clients, but in order to do so, I have a line of credit and I depend upon it.

For example, I have to purchase and place my Valentines order for roses in December, I have to pay up front, look into my crystal ball, & guess how much I am going to sell, and prepay for it in December, it amounts to many thousands of dollars in purchases, all on an estimate of how many roses I think my customers are going to buy.It requires credit to keep the ebb & flow going, which doesn’t necessarily mean DEBT, it just means managing accounts receivable against payables. I won’t get that money back until March 1st, at the earliest. And I do have to continue to eat!

When the banking industry suddenly has a crisis and decides to call due all of the lines of credit it’s a bit difficult. I understand, and I don’t have a problem with it, except that it makes it tough all the way down the chain. What I do have a problem with is the credit card company that decides to raise their interest from 9% to 32% for no reason other than the fact that they can!

I personally don’t think this is any different than extortion, and this could be the reasoning behind this new credit card act now in the senate. I’m sure that it is like everything else in government, it will have a bad side to it, but I think something needs to be done to stop these bad practices.

My New Years wish….I wish for someone to give me a million dollars with no strings attached, except to take care of myself and make myself richer.  Hey it worked for the bankers, why can’t it work for me? I’m only asking for a tiny million and it never hurts to ask right?