Documentaries like Maxed Out and In Debt We Trust have looked the problem of ever-growing consumer debt, and the role that government has played in its expansion.Now , Senator and Democratic presidential candidate Barack Obama wants Washington to play a role in the solution too. Here are some clips from a statement Obama issued, as well as a discussion he had with debt counselors and consumers burdened with heavy debt. Courtesy of The Associated Press:
"The truth is, our middle-class families are not going to be secure so long as they can't get out of debt. If we're serious about stopping Americans from falling deeper in debt, we've got to crack down on predatory credit card companies that are pushing them over the edge....
"Many credit card companies are tricking Americans into agreements they can't afford because that's how they make big profits. Well, no company's bottom line should come before what's right for the American people."
Obama proposes a credit card bill of rights. From the Senator's website:- Ban Unilateral Changes: Currently, credit card companies can unilaterally change the terms of a credit card agreement at any time for any reason with only a 15-day notice to the consumer. He would ban these unilateral changes in credit card agreements unless companies have obtained written consent from consumers and have followed the rules and terms of the agreement.
- Apply Interest Rate Increases Only to Future Debt: Credit card companies often apply increased interest rates to both new debt incurred by the cardholder, as well as previously incurred debt. He would require increased interest rates to apply only to future credit card debt, and not to debt incurred prior to the increase.
- Prohibit Interest on Fees: Credit card companies often charge interest on transaction fees, such as late fees or paying a bill by telephone.
- Prohibit "Universal Defaults": "Universal defaults" are a practice in which a credit card company raises an individual's interest rate based on failure to pay a different creditor on time.
- Require Prompt and Fair Crediting of Cardholder Payments: He would require credit card issuers to apply payments first to the credit card balance with the highest rate of interest and to minimize finance charges.
These are pretty ambitious ideas -- It could certainly be argued that these kind of reforms (which would never get through Congress, by the way) overstep the role of government, and are anti-free market.
I would like to see credit card industry reforms focus more on disclosure, at least for starters. Credit card contracts are opaque and even well-educated people don't understand them. It's far more complicated than it needs to be, and it's nothing but obfuscatory: They're confusing so that people can't understand and make an informed decision.
Interestingly, there is nothing in this bill of rights about disclosure, which is the probably the one thing that both parties could get by their corporate masters. But when you're on the campaign trail, ambition trumps practicality.
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Reader Comments (Page 1 of 1)
12-04-2007 @ 9:16PM
Rick Green said...
You can help capture the headlines on January 3rd for Barack Obama!
We will set a one day political fundraising record on January 3, 2008!
January 3rd, 2008 is the Iowa caucus. The nation and the world will be watching.
I want to show my support for Barack so badly, but I don't live in Iowa! Pass the word. YOU can make a difference. You WILL make a difference. Make a difference for your children and for a world of potential.
pass the word.
If Ron Paul can raise millions in one day, then we can raise tens of millions for Barack.
January 3, 2008, go to BarackObama.com and donate a dollar, ten dollars, twenty dollars. America will be watching and listening. Send the fence sitters a message!
You can ensure Barack Obama gets the headline on January 4th. Your dollar vote will send a powerful message.
I'm not a regular blogger. You know where this message can be posted to get exposure. You can copy and paste this message in an email to your friends. So this is what we can do. You and me and everyone who supports Barack Obama as the candidate of hope.
BarackObama.com
Be heard on January 3rd.
Rich Green
RGreen1@new.rr.com
BeHeardonJan3rd.com pass the word.
12-14-2007 @ 7:31AM
hrpalmer said...
This is exactly the kind of bold action we need to begin to curb the greed-based excesses in our society that are making some people rich, but are exploiting the average person and raping the environment. While the free market has it's advantages and usefulness, we have all seen how destructive and abused it can be. We can not continue to let the "corporate masters" run our government and our economy to the benefit of a few and the detriment of most. That's why we need a president who will take on these interests.
It is hard picturing Hillary doing tha effectively. John Edwards, maybe. Republicans? Not a chance.
12-18-2007 @ 12:07AM
FJ Stratford said...
Anyone who has studied a little bit of economics knows that the effect of this will be - correct - fewer Americans getting access to credit.
Way to go Barack! You just proposed greater insolvency for all middle class and poor Americans. I know you mean well but please dont ruin the already faltering economy by proposing ideas that sound nice on paper but will ruin us all!
When will you think thing through before you announce them to the world?
This is like your idea of talking to Ahmedinejad, Castro, Chavez and Kim without preconditions and preparation again... quite naive, to say the least.
omg! and you say you want to be president? those two things will trash the economy and our already trashed foreign policy.
I am so disappointed.
1-18-2008 @ 1:47AM
Mr.C said...
Our Loan Compliance Advisory Group is committed to helping "Protect The American Dream." We are dedicated to helping Homeowners Nationwide, that may be victims of Deceptive Lending Practices.We are open for any suggestions on how we can help. Please contact Joseph Bisogno at (800) 529-7184 or visit our web site at: www.loancomplianceadvisorygroup.com
Several members of our Loan Compliance Advisory Group attended the "March on Wall Street." We support the "Save Our Homes/Restructure Loans" important message that Rev. Jackson and his dedicated coalition members are spreading across America. The December 10, 2007 rally, one of several recently held across the United States, sponsored by Rev. Jessie Jackson's Rainbow PUSH Coalition, the National Association for the Advancement of Colored People and the Urban League, was a magnificent well planned; and informative event.