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    "Consumer Credit Fairness Act" Legislation

    March 24, 2009

    U.S. bill offers bankruptcy relief from card lenders

    Abusive credit card practices were criticized on Tuesday by a U.S. senator who has introduced legislation prohibiting lenders from making claims on consumers in bankruptcy if interest rates are excessive.

    Senator Sheldon Whitehouse, a Rhode Island Democrat, told a hearing on credit card practices that Americans are relying more than ever on credit cards to make ends meet and banks are trying to squeeze as much profit as possible from cardholders.

    "The standard credit-card agreement gives the lender the power to bleed their customers through evolving and ever more crafty tricks and traps," said Whitehouse, who chairs the Senate's subcommittee on administrative oversight and courts.

    Whitehouse in January introduced legislation aimed at giving consumers seeking bankruptcy protection the ability to negotiate terms with lenders.

    His Consumer Credit Fairness Act would also prohibit lenders from making claims in bankruptcy if interest rate thresholds are exceeded.

    The bill would set the base rate at 15 percent plus the current yield on the 30-year Treasury bond. The rate would include all penalty fees and charges, in a step aimed at preventing lenders from applying "back-door" rates.

    In addition to credit cards, the bill also targets payday loans, auto loans, overdrafts and layaway plans.

    It would also exempt consumers from being required to take a means test to qualify for bankruptcy protection, a provision that was included in the landmark 2005 bankruptcy law that critics charge was too generous to lenders.

    The top Republican on the subcommittee also criticized credit card companies but urged caution on capping interest rates.

    "They are a cold-blooded bunch out to make a profit," Jeff Sessions, a Republican from Alabama, said of the credit card companies. But "I'm not comfortable about capping interest rates."

    As more Americans lose their jobs and homes, credit card practices have become a central focus in Congress as lawmakers draft a broad plan to revamp the regulation of financial institutions partially blamed for causing the current crisis.

    The House of Representatives Financial Services Committee is expected to consider a credit card bill as soon as next week.

    Source:
    Yahoo Finance
    Reporting by John Poirier; Editing by Tim Dobbyn
    Last edited by Flamingo; 03-26-2009, 02:47 AM. Reason: To conform with forum posting rules - OP please take note

    #2
    I posted in another thread about an interesting article which has a direct correlation with this issue if anyone is interested.


    Here is the link with more info


    The article is written by an attorney and discusses usury and it's effects on the economy. I found it interesting and thought others might if they are interested in this proposed legislation.

    Comment


      #3
      "They are a cold-blooded bunch out to make a profit," Jeff Sessions, a Republican from Alabama, said of the credit card companies.

      I know when they starting jacking our rates up, lowering our limits to what are balances were, adding fees for over the limit, etc and we were current, they forced us into Bankruptcy.

      Comment


        #4
        so, splain this to me... before i get my hopes up, if they eliminate the means test, does that mean that disposable income will no longer be an issue?
        "it looks like i picked a bad day to give up sniffing glue"! [McKroskey, airplane]

        Comment


          #5
          I bet there will still be some sort of means test. The whole reason the 2005 legislation came out was because the cc's thought there was too much bankruptcy. In Congress' opinion, they decided to make it hard as hell to pass a means test to bend to the cc's. I just don't see them giving up on a means test that easily. I could be wrong but if the Prez wants the financial sector to start lending again, the cc's are going to want some sort of means test. The worst part is they will probably get it.

          Here's to hoping it gets easier. There is supposed to be no such thing as debtor's prison, but try to tell that to someone who is trying to file bankruptcy!
          Filed - 12/24/08 (Merry Christmas Credit Cards!)
          341 - 2/5/09
          Confirmation - 3/13/09....Happy Dance!!!

          Comment


            #6
            i wish they would bring back debtors prisons... at least i would have a chance to go over the wall and escape...

            i see they have dating sites for women who are looking for convicts, so its not all bad..
            "it looks like i picked a bad day to give up sniffing glue"! [McKroskey, airplane]

            Comment


              #7
              Originally posted by floridian View Post
              i wish they would bring back debtors prisons... at least i would have a chance to go over the wall and escape...

              i see they have dating sites for women who are looking for convicts, so its not all bad..
              Uh...I would think twice about engaging in a relationship with a woman trolling prisons for man!
              Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -Rick

              Comment


                #8
                That is freaking hilarious!
                Filed - 12/24/08 (Merry Christmas Credit Cards!)
                341 - 2/5/09
                Confirmation - 3/13/09....Happy Dance!!!

                Comment


                  #9
                  its for women who like to know where their man is at night!
                  "it looks like i picked a bad day to give up sniffing glue"! [McKroskey, airplane]

                  Comment


                    #10
                    Well, I already paid my lawyer! I am waiting until July to file just to pass the means test. So if this new law flies, does that mean I can file RIGHT NOW and not have to wait until then? How long will it take before this law is expected to pass? I am tired of waiting. I want to go BK RIGHT NOW but have to wait. I feel like I am walking on egg shells right now.

                    We made almost $8,000 in December because of a one-time Christmas bonus and now that has totally screwed me up for the means test for Florida.

                    Comment


                      #11
                      anyone heard any updates?
                      "it looks like i picked a bad day to give up sniffing glue"! [McKroskey, airplane]

                      Comment


                        #12
                        Yeah, I'd really like to know so I can file right now as soon as they get rid of the means test.

                        Comment


                          #13
                          i just read that the bk law changes under consideration today, concern retailers.... its not looking good for individuals sofar..
                          "it looks like i picked a bad day to give up sniffing glue"! [McKroskey, airplane]

                          Comment


                            #14
                            Originally posted by floridian View Post
                            i just read that the bk law changes under consideration today, concern retailers.... its not looking good for individuals sofar..
                            Is this going to be another show stopper for me so I won't be able to file BK?

                            I just had my taxes done. After all expenses and everything, turned out we're reporting that our household income barely made over $30,000 last year. WOW!!!

                            Comment


                              #15
                              Very interesting topic. It sounds so funny

                              Comment

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