Hi All,
Below is an interesting piece of proposed anti-usury legislation that you might want to contact your representatives about. It would override the rate abuses that have been made possible by the National Bank Act, that allowed credit card issuers to circumvent state anti-usury laws by locating in states that have anti-consumer laws like Delaware and South Dakota.
The piece also makes reference to credit unions, in that their rates have had a similar cap for years. One way to push back against all the abuses of the banking industry is to transfer your accounts to a credit union. A credit union is a not for profit financial institution, and when you become a member you also get a voting share. You are not a customer, you are an owner of your credit union. In the past, it was hard find a credit union, because most of them were limited to people who worked in certain professions, or for certain employers. Now, there are quite a few community credit unions that only require that you live or work in a certain geographical area.
Credit Unions typically offer free checking, no fee atms, and the gamut of loans from mortagages to cars, as well as credit cards. When you call and ask to speak to the manager, she comes to the phone, and sincerely tries to help. After all, she works for you! My credit union recently helped me get out of Chase hell. If you’re interested in one way to vote with your feet, use this link to locate a credit union in your area.
Credit Union National Association (CUNA)
_______________________________________________________
Washington, DC — In an effort to provide direct financial relief to tens of millions of American families, Congressman Maurice Hinchey (D-NY) today announced that he’s introduced legislation that would cap interest rates on credit cards and all other loans at 15 percent. The Interest Rate Reduction Act would rein in the skyrocketing rates that banks and financial institutions are charging customers with little or no warning and without any justification. U.S. Senators Bernie Sanders (I-VT) and Richard Durbin (D-IL) authored the bill and are sponsoring it in the Senate.
“For years, the credit card industry has taken advantage of hardworking Americans by finding any little excuse or reason to dramatically increase their rates, which only serves to drive those people further into debt and make them more dependent on the credit card industry,” Hinchey said. “The abuse exhibited by credit card and other lenders is a major reason for the economic hardships being felt in households all across America. A fair and healthy lending system is critical to the success of hardworking Americans and the recovery of the economy. This bill helps limit credit card and general lending abuse by placing a reasonable cap on the rates that can be charged to Americans. An interest rate cap gives the American people a legitimate chance to climb out of debt, enables lenders to still make a comfortable profit, and promotes long-term sustainable lending and borrowing practices.”
Hinchey’s legislation would impose a 15 percent interest rate cap on all loans at financial institutions. The bill would also impose a reasonable cap on lending fees, which have risen dramatically over the past decade. Importantly, the Federal Reserve could allow higher interest rates, but only under special circumstances when it determines that the 15 percent cap would threaten the safety and soundness of lenders and if money market interest rates have risen over the prior six months. These are the same rules that currently apply to credit unions, which have been forbidden from charging usurious interest rates on credit cards and other loans to their members for nearly 30 years. The interest rate cap has protected consumers at credit unions from being charged usurious interest rates, has not harmed the safety and soundness of these institutions; and has not negatively impacted the access to credit of credit union members. Furthermore, credit unions have been able to stay afloat throughout the credit crisis and have not received one dime of taxpayer assistance.
Credit-card debt in the U.S. has reached a record high — nearly $1 trillion. The average American household’s debt from credit cards has risen from $2,966 in 1990 to $9,840 in 2007. The debt crisis inundating so many Americans is partly the result of an industry with few regulations and little oversight. Consumers nationwide are facing excessive credit card fees, sky-high interest rates, and unfair, incomprehensible agreements that credit-card companies revise at will. In 2007, credit-card issuers imposed $18.1 billion in penalty fees on families carrying credit card balances — up more than 50 percent since 2003 and accounting for nearly half of the $40.7 billion in industry profits. Last year’s estimates were that credit card companies would break all records for late fees, over-limit charges, and other penalties, and pull in more than $19 billion.
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on Mar 25th, 2009 at 7:26 pm
Great piece of legislation. Unfortunately, the banks have their hands in too many polliticians back pockets.
on Mar 26th, 2009 at 8:05 pm
Received the following in the mail today…..
RE: Your account ending in ****
Dear ******************
In reviewing your account, we discovered that you were incorrectly sent a Change in Terms notice this past November. As a result, you may have been charged a $10 monthly account service charge(s) and your minimum payment due was changed to 5% of your New Balance.
We have already taken action to correct the terms on your account. We have credited your account for the $10 monthly account service charge(s). With your next billing statement, your minimum payment due will revert to its previous calculation of either 2% of your New Balance or 1% of your New Balance plus billed interest and any billed late fees. In additon, we set your promotional rate balance(s)–with no defined expiration date–back to its original terms. As always, your account remains subject to all terms and conditions, including default APR actions, as outlined in your Cardmember Agreement.
Your satisfaction is important to us, and we apologize for the error and any inconvenience this issue may have caused you. If you have any questions, please call us at the toll-free number on the back of your card. For your convenience, we are available 24 hours a day to assist you.
Sincerely,
Cardmember Service
Note: I hope that everyone receives this same letter. The wording of their apology though is interesting. The word “incorrectly” and “$10 monthly account service charge(s)” is an interesting choice of words.
Regards to all
on Mar 26th, 2009 at 8:54 pm
I read on another website that this happened to someone else. When the person called Chase, they said that he got included in a certain group of cardholders by mistake; so obviously, they are targeting certain customers.
on Mar 26th, 2009 at 8:55 pm
I recieved the exact same letter in today’s mail. very interesting wording…must be legaleze for we royally screwed the pooch…please drop the class action because our legal department just came to the realization that we can’t win this case.
My guess is they also got enough people to pay off their balances or switch their terms that they felt they could throw a bone to the few of us left over that could afford to pay the 5% for 3 months.
I’m still going to pay more than the minimum (as I had been for 2 years) but when this debt is gone I’m DONE with chase. Also makes me wonder if I should close my account now and lock in the rates I currently have…
Here’s to the good fight
on Mar 27th, 2009 at 7:38 am
That’s an excellent point Vic. I am also DONE with Chase forever. I am Irish so I NEVER forget who has wronged me in the past.
on Mar 27th, 2009 at 10:09 am
GREG
I am sure about 400,000 people feel the same way. As a matter of fact, if I were the owner of a large company, I would not reimburse any expenses charged on a chase card.
on Mar 27th, 2009 at 10:11 am
I haven’t received the letter yet, but I hope … Dr Lahm, Ladies and Gentlemen … who is going for champagne? I know it’s to early …, but …
Greg, many more people have a problem with Morgan/Chase. Some of us remember their collaboration with the Nazis, for example.
on Mar 27th, 2009 at 5:27 pm
They’re backing down! See the Wall Street Journal article at: http://online.wsj.com/article/BT-CO-20090327-711942.html
According to the article, they’re going to stop charging the $10 fee (and will refund the amounts previously charged), but will still require a 5% minimum payment. I can live with that! Thanks for your efforts Dr Lahm and company!
on Mar 27th, 2009 at 8:01 pm
Nazi’s?
Anna, how many scientists do you suppose…voted for Herr Fuhrer?
http://www.colorado.edu/ibs/pec/johno/pub/nazi_long/Pnazi_long.htm
Pretty scary stuff Anna, still think the world should continue to elect those who engage in class warfare and rile the lower class to gain office?
on Mar 28th, 2009 at 4:03 am
Marv,
You shouldn’t comment on history – you don’t understand it. Marv, Rush isn’t the best source of information and the greatest teacher of history.
Now, I am not sure I understand what you’re saying.
Yes, Chase and its Republicans (the Bushes and the Rockefellers, for example) are known for their collaboration with the Nazis (yes, Marv, during the war too).
Many German scientists supported Hitler. Many also ended up here. Moreover, it looks like one of the Rockefellers (not exactly the lower class) was LOOKING for Nazi psychiatrists and propagandists to bring them here to strengthen … a certain party (you can guess which one) and to brainwash the population (you can guess if they succeeded).
on Mar 28th, 2009 at 9:51 am
Anna,
Great spin. I linked you to a statistical analysis from a major university showing exactly how the Nazi party consolodated enough democratic support to finally come to power.
How Rush, or the Rockafellers are involved, i’m not sure, but it may interest you to know that I do not have an affinity for either despite your implication.
I know fearmongering class warfare when I see it. I have witnessed which party has practiced it for the last 45 years personally. Prior to this I guess I will have to trust those which represent themselves as historians.
I merely pointed to the parallels between the way the Nazis coalesced thier constituency and the tactics of our new administration.
Most of the Nazi sceintists which you refer to supported the regime under protest/duress as did the industrialists and intellectuals.
Nazis came to power by turning the lower class against thier more successfull countrymen. This is an effective formulae which the left knows well.
on Mar 28th, 2009 at 3:54 pm
Marv, I don’t want to continue, because it doesn’t make sense.
I guess you think that Madoff and the Rockefellers were just “fortunate.” Sure, nothing else happened.
I don’t need your links. I know how Hitler became Chancellor. I also know what you don’t understand, namely, the fact that unbalanced societies with economic extremes and high level of unfairness end up ugly. Period.
“I merely pointed to the parallels between the way the Nazis coalesced thier constituency and the tactics of our new administration.” I see a parallel between you and Hitler – mouths and the ability to talk; legs and the ability to walk, etc.
This is utter nonsense, and I suspect Rush/Karl behind it.
on Mar 28th, 2009 at 9:01 pm
>>the fact that unbalanced societies with economic extremes and high level of unfairness end up ugly. Period.<<
This is so absurd that no thinking person would dare utter it in public.
You are fortunate to live in a country and time where you are part of the largest middle class in the history of the world. You use this to somehow justify the use of class warfare to avoid some inevitable “ugliness”
You further suggest that my failure to agree with you is some proof of ignorance. What are you…omnisceint?
Go on Anna, dring the Koolaid, pay no mind to the prone bodies here an there, they are merely resting, awaiting the Rapture
on Mar 29th, 2009 at 6:43 am
Marv, so many words, just to cover the fact that you and Hitler are alike.
Go away.
on Apr 11th, 2009 at 4:19 pm
Let’s stay on track with the pressing issue at hand. Chase is receiving bailout money financed by us the taxpayer and in return Chase is screwing us over. Are we indentured serfs or what? Republican and Democrat politicians have had their palms greased by the powerful, wealthy financial sector for too long. We have to hit the streets on this one. I am so grateful that someone had the gumption to file a class action lawsuit on our behalf. Thank you so much!!! I’m also grateful for this website. Let’s not abuse it.