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Question: You told us a couple of weeks ago that you’re asking Ohioans to give you their comments and stories about unfair credit card practices. Now the comments are starting to come in. So what are Ohioans saying, and what can be done?
Treasurer Cordray: Well I can tell you that we’ve received about seven hundred comments from all over Ohio in just the first few weeks, which has really demonstrated to me that people in our state are highly concerned about credit cards, credit card debt, and the way they’re being treated by credit card issuers.
We thought we’d share some of those with you, since right here in this weekly segment was one of the first places where we asked viewers to share their thoughts about credit cards and unfair credit card practices
Question: Okay, let’s start with this one… a comment shared by Tina Vanleer of Reynoldsburg. She said, “The economy and the world is already in a turmoil mess!!! Why would these RICH CREDIT CARD COMPANIES continue to get richer off of hard working struggling people!!! The government needs to get involved and control or regulate some of these companies.”
Treasurer Cordray: This gives you a good idea of the kind of passionate concern that my office is hearing in these comments.
The good news is, Tina’s idea about the government getting involved is exactly what’s happening.
The whole reason my office is gathering these comments is because several federal agencies are proposing some tougher rules for credit card issuers, saying they can’t do things like raise the interest rate on an already-existing balance. The new rule would say, a higher interest rate can only be charged on your new purchases.
But right now the federal authorities are accepting comments, and I want to make sure they know that we in Ohio want these new stronger protections against unfair credit card practices, so we’re going to forward on all these comments.
Hopefully, the new rules will be put into effect later this year.
Question: Here’s another one, from M Aho in Twinsburg: “I am in favor of passing the proposed rules to end “gotcha capitalism”. I have had unfair late charges on a credit card with an unfair/short payment cycle. I mailed my car payment and credit card payment on the same day to the same bank. The car payment arrived/posted in time BUT the credit card payment was not posted until several days later and one day after the due date, resulting in a $39 late charge.”
Treasurer Cordray: We’re getting lots of comments from people who feel the late charges and over-limit charges are getting out of control.
One of the new proposed rules says that credit card issuers have to give you a fair amount of time to make a payment before they consider it late and sock you with a late fee.
Right now, they can tell you that your next payment is due in two weeks if they want, and if you can’t get the money to them by then, they get to charge you a fee.
The new rules would say they HAVE TO give you at least 21 days.
Question: Okay… one more… Connie Krauss of Wadsworth wrote, “Their methods of preying on college students is absurd. When my daughter graduated from college she had a credit card that started with a limit of $1,000. When she was finished it was a limit of $20,000 and she had no job. I am still paying that credit card after 4 years.”
Treasurer Cordray: This is an example of something that is NOT answered right now in the proposed rules, but I think it’s important to make your voice heard anyway.
Not only is my office going to forward all these comments to Washington… we’re also going through the comments to find proposals for more, additional changes that everyday people feel need to be made, to other credit card practices they feel are unfair.
We’re going to make the suggestion to those federal officials that they consider those proposals… like this one, to in some way limit the marketing of credit cards on college campuses.
We’ve discussed here before that even young adults, who credit card issuers KNOW don’t have the means to repay what they borrow, are still the target of heavy credit card marketing because some of these issuers are counting on the fact that Mom and Dad will bail the young person out, to make sure their son or daughter doesn’t start out in life with a bad credit rating.
Question: People only have a limited time to submit these comments, though, right?
Treasurer Cordray: That’s right… through August 4th at our financial resources Web site, www.YourMoneyNowOnline.org.
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