More scrutiny of financial products
May 27, 2009 | USA Today, alternatives, federal legislation, industry | Comments (0)USA Today has an editorial today that’s frankly kind of vague:
The real problem for consumers is not the lack of laws to protect them. In many cases, they exist. The deeper failure is the lack of any federal agency looking out for consumers’ interest across a wide array of financial products, from credit cards to “payday loans” to mortgages. Oversight is splintered across an array of agencies that tend to treat consumer protection as a stepchild.
They want more oversight or something. But the American Bankers Association says “enforce existing laws.”
Up, up, up
March 16, 2009 | USA Today, industry | Comments (0)USA Today, which has covered the credit card industry very thoroughly, has a story today about how banks are raising credit card fees to cover the cost of delinquencies.
“Divorce for me, means cheap jewelry for you”
February 19, 2009 | USA Today, alternatives, industry | Comments (0)USA Today reports on the pawnshop boom. The article reads like a bad country song. A coincidence that they focused on a pawnshop in Nashville?
Credit card reforms big topic in Congress
February 17, 2009 | USA Today, alternatives, industry, media coverage | Comments (0)From USA Today:
As credit card fee increases squeeze more consumers, lawmakers are stepping up efforts to reform criticized practices.In the latest round of fees, Capital One (COF), Citibank (C) and HSBC are raising interest rates for millions of credit card borrowers. Chase (JPM) is tacking on a $120-a-year fee and raising the minimum payment from 2% to 5% of the balance for hundreds of thousands of consumers with low interest rates. The actions come as unemployment rises and more consumers struggle to pay their bills.
Credit card changes getting media attention
December 16, 2008 | USA Today, alternatives, industry, media coverage, personal finance | Comments (1)From today’s USA Today:
Across the nation, a growing number of consumers and financial experts are complaining that sudden credit card limit reductions and sharp interest rate increases are triggering a domino effect that makes it harder for consumers to juggle bills, stay in homes and avoid going broke. No official data are available on how many people are being pushed into financial distress by credit cards rather than mortgages. But credit counselors, bankruptcy lawyers and legislators say banks increasingly are pummeling consumers for making the smallest payment error — or making no error at all.
The shift comes as regulators and legislators have spent the last year pointing to toxic mortgages and overextended home buyers as the culprits behind the financial crisis. Credit cards, by encouraging a society of spenders rather than savers, have played a significant role in loading up consumers with unaffordable debt whose rates and terms can change at any time.
“If people get charged 30% interest, that is going to push them over the edge,” says Sen. Carl Levin, D-Mich., who has co-sponsored a bill to crack down on credit card fees and rates.
The Federal Reserve is expected to release a rule shortly aimed at cracking down on hair-trigger jumps in card rates and fees, but consumer advocates worry it won’t go far enough in reforming credit card practices.
The Payday Pundit can’t criticize banks and card companies from reassessing their risks and changing terms, but the lack of transparency is appalling. Banks need to catch up to the standards of payday lenders in disclosing terms, fees, and other practices.
FDIC slams bank fees!
December 3, 2008 | USA Today, alternatives, industry | Comments (2)From USA Today:
Overdraft fees are boosting banks’ profits at the expense of consumers, especially young and low-income people, finds a new Federal Deposit Insurance Corp. study.The 18-month survey found that most banks automatically enroll consumers in overdraft programs — some don’t allow them to opt out — and then cover overdrawn transactions for a per-item fee of up to $38.
The survey excludes many of the largest banks in the nation, because it covers only FDIC-regulated banks. Still, it’s the largest study of overdraft programs by a bank regulator and helps “fill an important universe of information that has not been available to policymakers,” says Andrew Gray, agency spokesman.
Americans cutting back on everything
November 17, 2008 | USA Today, alternatives, industry, personal finance | Comments (0)Good story today in USA Today about American cutting back on expenses. The story also has a benign reference to a woman needing a payday loan.
Center for Consumer Freedom: Keep payday loans in competitive market
February 29, 2008 | USA Today, alternatives, industry, media coverage, positive media coverage, research | Comments (0)The Center for Consumer Freedom has a great letter to the editor in today’s USA Today responding to a recent editorial on payday lending.
“USA TODAY’s editorial on payday loans invoked the Federal Deposit Insurance Corp.’s (FDIC) stance in support of putting caps on these loans…But the FDIC’s own chairwoman authored a study in 2005 that painted a very different picture. Her report shows that payday loans can be a lower-cost option than bounced check or overdraft fees and that credit unions are sometimes not available as a reasonable alternative.”
Well said.
