Archive for the ‘Congress’ Category
Tuesday, August 10th, 2010
As you may know, last year Congress passed a law called the Credit Card Accountability Responsibility and Disclosure Act of 2009. This law, nicknamed the CARD Act of 2009, was designed to regulate a variety of unpopular credit card tactics, such as interest rate increases without notice, inactivity fees and unfair interest calculations.
According to credit card industry analysts, the CARD Act of 2009 will eliminate over $390 million in fees for credit card issuers. Not surprisingly, the credit card companies do not intend to walk away from this fee income. For every fee and penalty eliminated by the CARD Act, credit card issuers are finding replacements. For example the annual fee for many cards has been increased, sometimes dramatically. Card issuers are also sending corporate card applications (called "professional cards") to consumers. Corporate cards are not included in the CARD Act.
The Wall Street Journal recently ran a story explaining how the credit card companies intends to recoup their lost fee income. The bottom line: the CARD Act of 2009 will eliminate some consumer-unfriendly tactics used by the credit card companies, but it will trigger an equal number of new consumer-unfriendly tactics. Caveat Emptor.
Posted in CARD Act of 2009, Congress, Consumer Protection, Credit, Disclosure, Law, a, accountability, act, act the, and, applications, called, card, corporate, credit card company tactics, credit card fees, dramatically , fees, inactivity, included, issuers, issuers , journal, notice, passed, responsibility, sending, street, tactics, the, unfair, unpopular, wall, year | Comments Off
Monday, June 28th, 2010
Despite some signs of economic recovery across the United States, the nation's unemployment level remains near 10 percent and, according to recent reports, concerns in the Senate over the country’s budget deficit and expansive recovery spending could prevent unemployed Americans from seeing extensions to their benefits.
So how large are the ramifications of Congress’s failure to act? Sources indicate that:
- As many as 900,000 people have already seen some decrease in the unemployment benefits they receive
- If no congressional action is taken, an estimated 1.2 million people will lose some or all of their unemployment benefits by the end of June
- If Congress doesn’t act by the end of July, more than 2 million could be affected
The lack of action —or rather, lack of productive action—:on this matter in Congress will likely mean only temporary halts to unemployment support, but those affected could see their finances take a serious hit, particularly because so many Americans are in financial situations that mean they’re only a few late bills away from default, foreclosure or filing for bankruptcy.
Unemployment Benefits and Extensions
Because of the country’s unusually high unemployment rate and difficult job market, the federal government has extended the 26-week state- and employer-sponsored unemployment insurance programs with three other forms of assistance, all of which could expire without Congressionally approved extensions. The forms of unemployment insurance in jeopardy include:
- Extension of benefits: This program allows those on unemployment to receive benefits for between 60 and 99 weeks, rather than the half-year state standard.
- Extra weekly money: Another program offers an additional $25 weekly to certain unemployment beneficiaries.
- Extension of COBRA benefits: The third program allows those who have lost their jobs to continue the health coverage they had at their last job and subsidizes the cost of that coverage, paying 65 percent for up to 15 weeks.
As some analysts have pointed out, for the millions of Americans unable to find a paying job, these extended benefits can mean the difference between good health and unmanageable medical bills.
Perhaps unsurprisingly, Senate Republicans are reportedly concerned that these extensions, while giving invaluable aid to many American families, are contributing ever more to the United States’ budget deficit, which is skyrocketing thanks in part to recovery efforts.
Though the situation may be sticky for some families, sources note that Congress still has time to act to renew the extensions.
Posted in Bankruptcy, Congress, Economy, unemployment | Comments Off
Monday, June 7th, 2010
The financial reform bill approved by the Senate last month and now being revised before it faces votes in both houses of Congress could lay the groundwork for significant changes in the country’s financial system. Here’s a look at what you, as a consumer, can expect.
- More protection: If passed and signed into law, the bills would introduce an agency devoted solely to consumer protection. As part of the Federal Reserve, the Consumer Financial Protection Bureau would be charged with regulating lenders and protecting consumers from predatory lending.
- Free credit scores: While free credit report access (available at www.annualcreditreport.com) has been a reality for a while, Americans still have to pay to view their credit scores. The new bill would give citizens the right to view one free credit score along with their free reports from each of the bureaus per year.
- Increased protection at the bank: For now, the FDIC insurance limit for bank accounts remains at $250,000 (before the change, they stood at $100,000). This limit is set to expire in 2013, but could be made permanent with the new bill.
- More privacy: Currently, employers are permitted to check a potential employee’s credit report during the hiring process; one provision of the new bill would prohibit such employment-related credit checks unless the job involves matters of national security.
- Fewer mortgage penalties: Some provisions of the bill would limit or eliminate prepayment penalties on mortgages, which can act as a disincentive for a borrower to repay a loan early. Similarly, the bill would prohibit mortgage lender compensation that’s based on loan type, which has been linked to lenders leading customers into more expensive loans than they qualified for.
- Debit card fee limits: One provision seeks to lower debit card fees vendors pay, which could lower prices for consumers but could also backfire by prompting banks to raise fees in other areas to make up for lost revenue.
- Credit card use changes: In addition to offering customers discounts for shopping with a specific type of credit card, retailers would be able to set minimum transaction amounts for credit card use (as long as they’re applied universally).
As of now, of course, none of these provisions is guaranteed to make it into the final draft of the bill, but the changes reflect concerns brought on by the collapse of the housing market and the general problems associated with predatory lending that have reared themselves in recent years.
Additional Resources
Summary: Senate Financial Reform Bill
Summary: House Financial Reform Bill
Posted in Congress, Financial Literacy, financial laws, financial reform, house, senate | Comments Off
