In an effort to better protect consumers, lawmakers may soon require lenders to simplify the information they provide. Bloomberg News reported Feb. 23 that Democratic Sen. Charles Schumer of New York said in a recent Senate Banking Committee hearing that he no longer believes disclosure alone is enough to protect consumers from unfair or deceptive practices by credit card companies. Schumer, the force behind a 1998 law requiring the companies to put their banking information in a separate box, decried fine print and rate hikes caused by minor infractions written into credit card agreements.
The comment came on the heels of legislation introduced by Sen. Christopher Dodd, D-Conn. and head of the Banking Committee, that would change how credit card companies are allowed to change interest rates. Among other things, it would prohibit interest rate hikes unrelated to the cardholder's behavior and require that interest rate increases apply only to future purchases. And Rep. Carolyn Maloney, D-NY, has reintroduced her 2008 proposed amendment to the Truth in Lending Act.
In fact, Bloomberg wrote, two federal agencies have already issued rules intended to simplify the information provided to lenders. In December, the Federal Reserve found that the information on interest rates provided by credit card companies was so complicated that an ordinary person couldn't understand it, putting the credit card companies in violation of federal law. And more recently, the Department of Housing and Urban Development issued a three-page form intended to help mortgage borrowers understand the fees they will be expected to pay at their closings.
As Orange Count debt settlement attorneys, we believe these rules are (or would be) a step toward fewer loan defaults and more empowered consumers. As the Bloomberg article said, even Bush Administration officials believed that credit card fees and interest rate hikes are so confusing that an ordinary person truly can't understand them. Under those circumstances, the mandatory disclosure laws we already have are insufficient to truly protect consumers. The same goes for mortgage loan documents, which even the mortgage bankers in the article agree are too complex to allow buyers to compare offers.
Credit card companies don't seem to agree, but our Orange debt settlement lawyers believe that consumers and lenders both win when consumers have information that allows them to make smart choices. As things currently stand, we see too many clients who get into debt without realizing what they've agreed to -- and stay in debt without realizing that they have options. Our Placentia debt settlement attorneys can help clients negotiate with lenders to end their debt in exchange for a payment they can afford, set up a payment plan or explore whether bankruptcy is appropriate for them. We can also help stop violations of the federal Fair Debt Collection Practices Act by harassing, aggressive debt collectors.
If you're feeling overwhelmed by your debt and you know you need help, Howard Law can help. For a free, confidential consultation, please contact us online as soon as possible or call us toll-free at 1-800-872-5925.