Lawmakers are proposing new laws that
may mean that you’ll no longer see some credit
card fees and bank charges. There are three separate
laws—each targeting a different type of lender.
One targets credit card issuers, another banks, and
still another those companies that are often referred
to as predatory lenders.
In the first, the law would make it illegal for credit
card companies to raise a cardholder’s interest
rates if they paid an account late, unless it was
the credit card issuer’s account. Under the
current law, if a card holder pays anyone late—even
their electric bill or car payment—the credit
card issuer can automatically raise their interest
rates without advanced notice. The new law would only
allow them to do so if the late payment was made to
them. In addition, if the credit card issuer did have
the right to raise the card holder’s rates that
would only apply to new charges— the old balance
would remain at the same rate.
The second law deals with banks and the fees that
they charge for overdraft protection. Many times when
a consumer withdrawals money from an ATM machine,
the overdraft protection kicks in and allows the withdrawal,
but then charges the customer a hefty fee for the
privilege. The new law would require that the customer
know in advance that the withdrawal would overdraft
their account, and that they would be given the option
of whether or not to go forward with it.
Banks would also have to be more forthcoming in their
dealings with bounced checks. As it stands now, some
banks make it policy to clear larger checks first
on an account that is overdrawn, and then collect
many more fees for the smaller checks that don’t
clear. The new law would require that banks clear
the smaller checks first; reducing the amount of overdraft
fees the account holder would have to pay.
Finally, the last bill addresses the excessive fees,
interest rates and prepayment penalties of some of
the lenders who cater to those with bad or no credit—usually
due to low income. It’s estimated that these
low-income families lose a combined $25 billion each
year to excessive fees and interest rates. These customers
are being charged exorbitant rates and the new law
would curb what these lenders can charge.
If you’d like to know more about predatory
lending, visit this site to learn more: http://www.responsiblelending.org/
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