Begging For Pitchforks Part XXII
by digby
I guess they figure, rightly, that they are above the law and beyond shame so take what they can get:
One hundred percent of credit cards offered online by the leading bank card issuers still include practices that will be outlawed once legislation passed in May takes effect next year, according to a report released this week by the Pew Health Group’s Safe Credit Cards Project.
The report, “Still Waiting: Unfair or Deceptive Credit Card Practices Continue as Americans Wait for New Reforms to Take Effect,” also found that advertised credit card interest rates rose by an average of 20 percent in the first two quarters of 2009, even as banks’ cost of lending declined.
Some of the most harmful practices have grown more widespread, Shelley A. Hearne, managing director of the Pew Health Group, which oversees the project, said in a statement.
“Not one of the bank cards reviewed would meet the legal requirements outlined in the Credit CARD Act, which is bad news for consumers,” she said.
Researchers examined all consumer credit cards offered online by the largest 12 issuers in America, which control more than 90 percent of outstanding credit card debt nationwide. The report also reviewed cards issued by the largest credit unions.
Among the key findings: 99.7 percent of bank cards allowed issuers to increase interest rates on outstanding balances, and 90 percent of bank cards had penalty rate increases with the vast majority imposed by “hair triggers” of one or two late payments in a year.
[…]
“It seems that a credit card issuer could gain a distinct competitive advantage by the early implementation of the provisions of the CARD Act. But that is not being done,” Hardekopf said.
“Those of us who have looked to the self-interest of lending institutions to protect shareholder’s equity — myself especially — are in a state of shocked disbelief,” said Greenspan.
They don’t need or want to compete and they don’t care about the health of the system itself. Why should they? They know they can get away with this and that their customers can’t afford to be without credit and function in society. And they know they will be bailed out if they fail. I would say they are very much acting in their own self-interest and are protecting shareholder’s equity just fine. It’s the consumer’s who are getting screwed and who cares about them?
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