Have credit card companies already found a convenient way to dodge the new billing statement regs? You be the judge:
A lot of credit card holders already know there’s a new law on the books which requires lending institutions to break down how much borrowers would need to pay each month in order to completely erase their debt within three years. Lenders are required to post the breakdown on the front page of every billing statement.
The objective: Alert borrowers to the fact that submitting minimum payments every month actually leads to escalating debt, additional fees and possible penalties further down the line.
Great, right?
But there’s just one problem — a lot of consumers pay their bills online these days, and credit card companies aren’t required to post any such breakdown front and center on a card holder’s online account. In order for most online customers to see such a breakdown, they’d need to download a PDF copy of their original billing statement.
Bank of America, Chase and Citi Group defend the action, saying they’ve alerted customers of the changes via e-mail. Capital One is actually providing a temporary banner across the top of the login page, so online users are sure to know about the changes. Citi has added a button to its billing page, alerting customers to click and find out how to resolve their debt within three years.
But these are short-term measures, at best. And there’s still no word on whether the Feds will push for tighter regs, which extend to online billing.
The question is, whether these new regulations will actually have an impact. Has the Fed finally found a way to keep the credit card companies in check? Or is this just the latest move in an ongoing chess match between big banks and Washington lawmakers?
We’d love to know what you think in the comments section below.
Source: “New Credit Card Warnings Not as Startling Online,” by Candice Choi, Associated Press, 2/23/10
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Tags: credit, credit cards, debt, Fed, interest rates, IRS
March 11th, 2010 at 2:03 pm
The new regulations are useless. The cc companies already raised their rates in anticipation of what was coming so the regulations don’t help the customers at all. We’ve all already gotten screwed with higher interest rates and higher minimum payments. Just another example of how the Obama administration doesn’t really understand how things work in the real world.
March 11th, 2010 at 3:28 pm
I think the fact that the banks comply with the letter of the laws and not the spirit of the law tells us precisely how ethical that bank is. I’d stop doing business with a bank that was unethical.
March 11th, 2010 at 6:16 pm
It was very kind of the Feds to give the credit card companies a nine month advance notice of all the changes. It allowed the companies to jack up their rates way in advance of the new regulations. For instance: American Express now has an APR of 27.24% – a year ago, it was just a tad over 12.0%. I remember when (I was in the military) a rate of 25% was called ‘usury’ and was punishable by courts martial if done by and among military personnel.
From appearances to date, this is another one the Feds have messed up.
P J Wolf
Merced CA
March 18th, 2010 at 1:42 pm
Best thing to do is spend cash whenever possible. The credit card agreement is a contract so as boring as it may be, you should read it before signing. If you don’t understand then don’t sign.