Must Read Kos Diary: How the Bank Lobby Beat Credit Card Reform

[Stephanie]

This is a very long, very detailed diary that we all need to read. I've excerpted a small part of one section here, but please go read the rest and let me know what you think.

http://www.dailykos.com/story/2009/8/1/758671/-How-the-Bank-Lobby-Beat-Credit-Card-Reform

How the Bank Lobby Beat Credit Card Reform
by Pluto

==excerpt==

What to Expect from Your Banking Overlords

"The business model has changed," sighed spokesman Peter Garuccio of the American Bankers Association. "With that there will be ramifications, some not so good for the consumer."

Although the Banking Lobbyists were successful in producing a tepid, toothless bill, the banking industry itself has fired across the bow of any further attempts at regulation. To demonstrate the promised "ramifications," banks have begun enacting across-the-board rate hikes and forced defaults designed to trigger fees and punitive new terms.

If you get a letter from your card issuer, open it up and read it. Chances are, it's a notice that your rate are going up and terms are changing. The smaller the print and the lighter the ink, the more important it is. Here's what you can expect to see before the new rules take affect in 2010.

1. Raising Rates: All issuers will raise your rate immediately if you violate any part of the credit card agreement or make one mistake. Keep an eye on those due dates. Some banks, like Citi, are raising rates on all cardholders, across the board.
   
   
2. Changing Fixed Rates to Variable Rates: Bank of America pulled that one out of a hat this month. The rate will now change each month and will generally be 5 or more percentage points higher that the fixed rate the consumer has been receiving.
   
   
3. Minimum Payment Due: This is where credit card issuers are hitting consumers hard. Some banks are raising minimum payments from 2 percent to 5 percent. That means your minimum payments would more than double, on average from $400 to $1,000. Banks don't care if you can't afford it. Your default helps justify higher rates for all borrowers.
   
   
4. Cutting Credit Limits: Credit limits are being cut close to the outstanding balance with little if any notice. Sometimes you get a letter, sometimes a call. Sometimes you find out when you make a purchase, which triggers a hefty fee and a big hike in interest rates.
   
   
5. Closing Your Account: Banks are also closing cards you are not using regularly. Naturally, any reduction of available credit will adversely effect your credit rating, limiting all of your financial options and opportunities in the future.
   
   
6. Fees Fees Fees: Their all going up while they can. Most banks charge 3 percent of the balance transfer amount with no cap on the amount you'll pay. Chase just raised their fee to 5 percent making them the highest in the industry. On Cash advances, most charge 3 percent. but they're quickly inching up to 5 percent. All fees are increasing.
   
   

[Skittles]

1. what exactly did they beat?

they were GIVEN the time to do this

[SoCalDem]

2. All that needs to happen is this:

Stop using credit cards
Pay off balances ASAP
Stop banking at mega-banks (every community has small local banks)
Use the free online bill-pay
Use direct deposit
Use your debit card as P.O.S. (point of service..not the obvious POS :evilgrin:..) and get cash-back from the merchant..most banks do not charge service charges for P.O.S. usage

Check your account daily, online and look for the "pending" debits, so you don't overdraft.

If you are 50 or over you can almost always find a free checking account, with minimal balance required.

As credit card companies continue to downsize your account, quitting them gets easier:)

We bank at Provident bank. We have free travelers checks, free money orders, free checking, free online banking, free checks and even 1% extra on our CDs because we have direct deposit. The bank has a local phone number we can call..no more "press 1, press 6, hold & listen to music..

[izquierdista]

4. Small local banks

Banks closed this year:
Bank Name City State CERT # Closing Date Updated Date
Mutual Bank Harvey IL 18659 July 31, 2009 July 31, 2009
First BankAmericano Elizabeth NJ 34270 July 31, 2009 July 31, 2009
Peoples Community Bank West Chester OH 32288 July 31, 2009 July 31, 2009
Integrity Bank Jupiter FL 57604 July 31, 2009 July 31, 2009
First State Bank of Altus Altus OK 9873 July 31, 2009 July 31, 2009
Security Bank of Jones County Gray GA 8486 July 24, 2009 July 30, 2009
Security Bank of Houston County Perry GA 27048 July 24, 2009 July 30, 2009
Security Bank of Bibb County Macon GA 27367 July 24, 2009 July 30, 2009
Security Bank of North Metro Woodstock GA 57105 July 24, 2009 July 30, 2009
Security Bank of North Fulton Alpharetta GA 57430 July 24, 2009 July 30, 2009
Security Bank of Gwinnett County Suwanee GA 57346 July 24, 2009 July 30, 2009
Waterford Village Bank Williamsville NY 58065 July 24, 2009 July 30, 2009
Temecula Valley Bank Temecula CA 34341 July 17, 2009 July 23, 2009
Vineyard Bank Rancho Cucamonga CA 23556 July 17, 2009 July 23, 2009
BankFirst Sioux Falls SD 34103 July 17, 2009 July 23, 2009
First Piedmont Bank Winder GA 34594 July 17, 2009 July 23, 2009
Bank of Wyoming Thermopolis WY 22754 July 10, 2009 July 15, 2009
Founders Bank Worth IL 18390 July 2, 2009 July 7, 2009
Millennium State Bank of Texas Dallas TX 57667 July 2, 2009 July 7, 2009
First National Bank of Danville Danville IL 3644 July 2, 2009 July 7, 2009

If you want to see the other 6 pages, go to http://www.fdic.gov/bank/individual/failed/banklist.html

[SoCalDem]

5. But, if you had less than $100K, you did not get harmed, and there are probably still plenty of them

:)

[fasttense]

3. It seems our liberal president and Congress just let the conservatives have their way with consumers

I feel like the only hen in a pen full of roosters. The only way to protect yourself is stop using those cards, now.