You probably won't be surprised to hear that credit card companies have been boosting their profits over the years by finding more and more ways to charge their customers. Yes, I'm speaking of firms such as MBNA
We've written before in Fooldom about high interest rates and other problems with the world of credit cards. Check out these articles:
- How to Owe $40,000 by Doing Nothing
- Credit Cards Sabotaging Mortgages
- Beware of Canceling Credit Cards
- $24 Billion to Card Companies. for What?
- Sneaky Credit Card Tactics
It's enough to make one despair that things may never get better. But cheer up -- they just might! Our friends at the Federal Reserve Board (you didn't know you had friends there? Well, you do!) are asking a lot of questions about the practices of credit card companies. They have a right to do so, because the administration of credit card lending falls under the Truth in Lending Act, and credit card issuers must follow the rules set by the Fed in Regulation Z.
Regulation Z, as Catherine Tumber pointed out in a recent article, "hasn't had a major overhaul since 1982. 1982! In that time, the banks have been deregulated, and financial institutions have won a slew of victories in the courts. Lenders now have much greater freedom to charge high interest and draconian late fees, to merge their various businesses to form bloated monstrosities, and to whittle away the authority of individual states to regulate banks within their borders. Over the past 22 years, there's been a revolution in the way financial institutions are run, and Regulation Z has been just sitting around...."
Well, things may be about to change. The Fed is looking into making some modifications to the rules. They're considering everything from the "convenience checks" that we routinely get (unsolicited) to the format of disclosures we receive. Better still, they want to hear from you! They're welcoming comments through March 28. Click over to their website and learn how you can chime in with your experiences and opinions. (Scroll down to the "Regulation Z" section.)
They've already received more than 40 comments. Here are some snippets:
- J.A. is in favor of "Requiring a lender to issue a simplified table in the 'change in terms' notice, showing pricing 'before' and 'after' the change."
- S.B. said: "Really, if they can't make a profit at 20% interest rates, when I can only get 2.5% in the bank, they have a fundamental problem that should not be off loaded onto the card holders."
- C.H. opined: "As a consumer, I want the Truth In Lending law to stay the same, with all consumer rights protected. I also want to be able to sue, as a consumer, not just go to arbitration. Do not bow to the special interests."
It's important to voice your opinions because you can be sure that the credit card industry is voicing its opinions. Let the regulators hear from the people they should be serving. (And consider, as Catherine Tumber suggested, sending your thoughts to your representatives in Washington, D.C., too.)
Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article.