Yesterday, the Quizzle Wire reported that credit card companies are finding ways to get around some new laws passed to protect consumers from unfair credit card practices. These alternative routes were put in place to counteract congressional moves like the CARD Act, which gives consumers protection against unexpected interest rate increases, over-limit fees and major changes to credit card terms, and a new bill passed in the House of Representatives today that will overhaul the nation’s financial regulatory system.
The bill must wait to be passed in the Senate until after the Independence Day recess.
So while you should still know about the other ways credit card companies are trying to make a buck, there are many other things in these new laws of which you should be aware.
Here’s a rundown of how financial reform will affect consumers like you:
Consumer Protection Agency
Consumers will now have a big brother who’s on their side. Housed within the Federal Reserve, the Consumer Financial Protection Bureau will help strengthen rules for banks, mortgage lenders, credit-card and private student loan companies, and consolidate large lapses in products like mortgages, credit cards and payday loans.
Many Americans have suffered immensely during the financial crisis. Now they can at least be reassured that someone will be looking out for their best interest.
Credit Scores
Mortgage lenders, credit card issuers, insurance companies and landlords all look at your credit score in deciding interest rates, premium prices or whether or not to even rent you an apartment at all. Now, if you get turned down because of your credit score, you’ll be able to view the score your lender is looking at – for free.
Granted, you can always use free credit report and score sites like Quizzle.com, but to find out what score prevented you from qualifying for a mortgage, all you now need to do is ask. And this also implies that you can ask for the score even when you’re satisfied with the rate or result of your loan application. Just ask and you shall receive.
Mortgages
The bill will prohibit the practice of lenders receiving bonuses for what type of loan they sell. This had made it previously beneficial for lenders to attempt to sell unfair adjustable rate mortgages, or high-interest loans. Consumers with an adjustable rate mortgage will also no longer be charged if they wish to pay off their mortgage early.
Credit and Debit Card Rules
If you go by the tenet that everyone is a consumer, you may come to accept this new rule more than those who can only think about how it will affect themselves.
Merchants can now under law refuse your credit or debit card unless you spend a certain amount. The minimum under which they can refuse is $10. So no more packs of gum or Starbucks coffee on the card. If the store says no, the consumer must abide.
Merchants will also not be allowed to give discounts to customers of specific credit or debit card issuers. This will only affect banks with more than $10 billion in assets, which would mean that merchants could be paying more to accept cards from smaller banks and credit unions.
Wall Street Complexities
Finally, the bill will clamp down on how Wall Street makes money off of unaware investors. The way this is to be done is confusing and complex. All that really needs to be known concerns the Office of Credit Ratings, created to supervise rating agencies such as Moody’s and Standard and Poor’s – agencies that came under fire for supposedly assigning positive ratings to risky investments.
Stay safe out there. The Wall Street world can be aggressive.
For more tips and tools to help you manage your home, money and credit – including the most affordable credit monitoring on the web and complete identity theft protection – visit Quizzle.com.
More from the Quizzle Wire:
- Credit Card Companies Find New Ways to Charge Consumers
- 5 Steps to Get out of Debt Faster
- 10 Credit Score Facts and Fictions
- Fed Caps Credit Card Late Fees, Bans Inactivity Fees
- How to Use Credit Cards to Your Advantage
Quizzle.com is the easiest way to get a complete understanding of your credit. Visit Quizzle.com to get your free credit report and score. No credit card or social security number necessary!
