Can we put the grown ups in charge?
Barack Mutual of Omaha’s Wild Kingdom Obama has proposed, I shit you not, a Credit Card Bill of Rights. You see, children, you’re just too fucking stupid to be trusted with managing your debt. And you’re too fucking stupid to read a contract before you sign it. So big brother will be there. And it will force credit card companies to play nice and fair. Because, you know, spelling out the terms in advance isn’t fair. And, though it’s just a rumor, they may even be required to give you a puppy.
June 17th, 2008 at 11:57 am
If he loses his bid for the Presidency, he could become a Senator and pass a law just like that!
June 17th, 2008 at 12:25 pm
This is not to say credit card companies are bastions of fairness and light, some are downright sleazy and underhanded. Of course, if people actually read their agreements and paid attention to their bills, and then dropped companies that either changed terms or practiced shady billing, such practices would vanish.
One thing we should change is the idea that a persons credit rating/score is negatively impacted when they close a credit line. It’s hard to dump a card that you don’t want anymore when doing so would cause your credit to take a hit.
June 17th, 2008 at 12:29 pm
BTW, a good bit about the credit system and Lifelock
http://www.schneier.com/blog/archives/2008/06/lifelock_and_id.html
June 17th, 2008 at 3:01 pm
Yes, maybe Uncle. But the credit card companies change the rules and terms of the contract so many times its impossible to keep up. This task is only exacerbated by the sheer volume of unsolicited credit card offers they send to you . . . all but ensure some important mail about new interest rates, etc will get tossed (eer shredded) too.
They also – through those same ever changing terms, constantly whittle away your rights to sue them and force you instead to binding arbitration before a highly biased panel, often times in sioux Falls, SD – which is cool if your going up there for pheasant hunting but sort of out of the way for everyone else (well, except me as I seem to have lots of clients in the area).
And the flyers they send are not nearly secure enough to prevent unauthorized application in your or my name for a credit card.
So we’ve got a potential situation here where someone could have a card in your name, run up the tab on it, run up the interest on it, and you have no reasonable opportunity and/or right to get the comapny to correct the mistake.
The credit card companies are long overdue for a take down. Now, the libertarian in me says NO to government regulation, but with that comes the understanding that there will be no arbitration either (nor limits on class action lawsuits) and if the card companies are wrong, they will be made to pay in court.
So far, they’ve avoided both having to answer to the legal system and any form of regulation (not unlike the insurance industry). So, Bravo to Barak My Name Is Slim Shady Obama for raising the issue, even if I doubt his proposed solutions amount to any actually solutions at all
June 17th, 2008 at 3:59 pm
y’know, if you click through all the way to the original story and read it, you’ll see he’s actually proposing three specific laws to pass as this “bill of rights” of his. mind criticizing those specifics instead of just jeering at the very idea of passing laws to regulate the credit industry?
June 17th, 2008 at 4:04 pm
There is no right to credit cards. There is no right to fluffy bunny slippers when you can’t pay your bills. That’s as far as my critique needs to get.
June 17th, 2008 at 4:23 pm
True, there is no right to credit cards.
But just try living and functioning in today’s world without one.
It’s almost as bad as trying to live and function without a driver’s license.
June 17th, 2008 at 5:16 pm
(actually, i’m living just fine with only a debit card.)
the laws being proposed do not give anybody a “right” to have a credit card, nor do they hinge on assuming any such right. try again, Uncle; try reading the proposed laws before criticizing them, this time.
June 17th, 2008 at 8:20 pm
Nomen,
I took your suggestion and read the original story, and the three proposed laws. After doing so, I have to say Uncle has it exactly right. Here’s why:
Obie said:
“ban unilateral changes to credit card agreements”
Uncle said:
“you’re too fucking stupid to read a contract before you sign it.”
If the contract allows them to change the agreement unilaterally, don’t sign it. If you do, you are agreeing that they can change it any time they want, any way they want. You get what you deserve.
Obie said:
“ban rate changes on past debt”
Uncle said:
“you’re too fucking stupid to read a contract before you sign it.”
If the contract allows them to change the rate on past debt, don’t sign it. If you do, you are agreeing that they can change it any time they want, any way they want. You get what you deserve.
Obie said:
“ban interest on transaction fees”
Uncle said:
“you’re too fucking stupid to read a contract before you sign it.”
If the contract allows them to charge transaction fees, don’t sign it. If you do, you are agreeing that they can charge transaction fees. You get what you deserve.
Notice a common trend here? Read the contract! If you don’t like the terms, don’t sign it! If you don’t understand the contract, don’t sign it! If the terms are unfair, or you don’t understand them, and you sign it anyway? Then it’s your own fault when you go bankrupt, and nobody else’s!
The government is not here to protect you from your own stupidity. That is what Uncle is saying.
June 17th, 2008 at 8:57 pm
Nomen – My response to your asking for specifics is now posted on my blog.
June 17th, 2008 at 8:58 pm
Actually I think Jake put it more succinctly than I did in my post.
June 17th, 2008 at 9:09 pm
This is a very, very common theme. People don’t like something, it should be illegal. Never mind that no force has been initiated. Never mind that all the terms are right there in the contract. Never mind that there is competition, which allows you to switch banks. Never mind that you can get along fine with a debit card. Never mind that freezing an interest rate for what could amount to the life of the cardholder would either raise the rates for everyone or result in the card issuing bank losing money. Never mind that if you think you can do better in this country you are free to start your own damned bank. Never mind any of that– I hate CitiBank and therefore I’m not going to stand up for their freedom. They in turn will not stand up for mine. We are thereby reduced to bitterly competing political factions in a country with no standards of property rights, no rights of association, no free trade and no Liberty. The trial lawyers and the politicians will do very nicely though.
As I stated in a recent post on Joe’s blog; I don’t need to know the details of your perpetual motion machine idea to know with absolute certainty that it will fail. Same with socialism, which is what we’re discussing here (Fascism, if you want to be more accurate, but I make no real distinction between one form of violent, organized crime and another).
You have to back way up and take a look at the fundamentals. What some of you are doing here, along with Barack Dip Dahdip DiDip Obamna, is tantamount to offering the details of a perpetual motion machine, and demanding that we go through all of them one by one, and allow you to explain them to us, before we can come to a fair conclusion. All I can do is shake my head.
June 17th, 2008 at 9:38 pm
First, i don’t know that there’s actually any formal written proposal. Next, I recall that one of the statements was something about protecting rights of people by not allowing interest rate changes on existing debt or some such. That is not a right. Rates don’t change automagically. They are based on something in a contract (prime, libor, whatever). And they’re agreed to upfront.
June 18th, 2008 at 7:05 am
Not necessarily. I’ve gotten too many offers to count where they fine print you weren’t even supposed to read says something to the effect of “you agree to the terms we haven’t even sent you yet, and also agree to every imaginable ‘amendment’ we may shove down your throat unilaterally thereafter.” As an insurance regulatory attorney, I wouldn’t wish that level of regulation on anybody, but I’d like to think there is a happy medium.
June 18th, 2008 at 7:31 am
actually, i don’t think i’ve ever seen a credit card agreement that didn’t demand i pre-agree to any unilateral changes the credit company might ever think to impose on me. assuming i wanted a credit card, i likely wouldn’t be able to vote with my wallet and pick the one that treated me decently, because none of them appear to do so. the “don’t sign it” chorus all take for granted that there are better companies i could sign on with instead, or that i can happily do without.
as it happens, i myself can happily do without, but i’ve already seen folks interject on this thread that it’s not always so simple.
June 18th, 2008 at 7:34 am
Mike W, thanks, but one blog at a time. i can only spread myself so thin.
June 18th, 2008 at 7:47 am
I sure hope none of the people on here who are all for this have marginal credit ratings – because they’ll be the ones who find they no longer qualify for a credit card if this goes through.
Its that old law of unintended consequences thing. Pass this and the risk/reward equation changes for the issuers. With more risk (e.g. cost of funds might go up but they can’t pass that on to cardholders) and less reward then issuers have to be pickier, charge higher rates, issue cards for shorter periods of time, make contracts terminate and have to be completely renewed from scratch (bye bye all those points you accrued) and many more such things.
So, your credit is only so so and you need to borrow? Enjoy going back to the Pawn shop and Payday lender – and all because Big Government decided to help you.
June 18th, 2008 at 7:48 am
“I sure hope none of the people on here who are all for this have marginal credit ratings”
Sorry that should have read:
“I sure hope none of the people on here who are all for this don’t have marginal credit ratings”
June 18th, 2008 at 8:09 am
Nomen, I used to use citi until they got anti-gun with the NSSF. Now, I use chase (amazon card, btw, which rocks). Their rates are fantastic. No hidden anything. And I get free stuff at amazon.
Of course, I also never have an outstanding balance on it.
June 18th, 2008 at 11:01 am
Nomen, there are none that treat you fairly? Ok, so what’s the problem?
How long would it take to bring them to heel if everybody just didn’t use them at all until the situation changed>
Oh, you say only a few would actually follow through on that, so you would inconvenience yourself by being a holdout? Well, which is better, running your own life or letting the lowest common denominator run it for you? Do you really feel it is imperative to participate in stupidity because it is so popular?
None of the above is intended as snark, those are serious slants on the answers to what may be the more appropriate questions we all should be asking ourselves. Give it whack, I’d be interested in your take on it.
June 18th, 2008 at 7:57 pm
oh, i’d say about as long as it’ll take us all to change the anti-gun policies of any major national corporation you care to mention through boycotting them for that. meanwhile i’ll be right over here, breathing in and out quite normally.
wait, i’m confused — which of those represents joining J. Random Stranger’s boycott in order to change the policies of big business again?