NYT – Credit Card Predators’ Law needs accelerated
By Ed | December 29th, 2008 | Category: Banking & Finance | No Comments »Saturday’s New York Times included an editorial titled “Curbing Credit Card Predators” discussing the recent actions announced by federal regulators regarding credit card issuer practices and suggesting that more legislative action in needed in Congress to “to get fair, clear credit card rules that allow (Americans) to make informed spending decisions.”
The editorial suggests that waiting for the implementation date of 2010 is too long and that Congress should make the changes and other reforms effective immediately.
Reading through the succinct summary of “loan sharking” techniques employed by US card issuers, leaves me in agreement that the US needs tougher laws, and fast, to protect consumers. It does not however change my opinion that individuals (and businesses) must always accept responsibility for their own actions and decisions.
Therein lies the rub though. It is not just private consumers who will suffer from the US credit industry’s “universal default” culture. Businesses will suffer from it too. Take one hit on your credit rating because a customer failed to pay, causing a cash-flow stutter and forcing late payment to a supplier, and the whole default cascades out to other credit lines.
In already constricted cash flow, such an incident leading to increased interest rates on plastic could collapse small businesses. It also leads me to question (again) eBay’s acquisition for sub-prime lender Bill Me Later, and whether it will be sellers globally who subsidise American debt defaulters in the current climate of San Jose doing all they can to shelter and protect the US home market whilst slaughtering their overseas subsidiaries.
Ed
