Why 69 is obscene.

According to a new report by Pew Charitable Trusts, the median length of the list of disclosures that you will be presented when you open a new checking account is 69 pages.

ƒFinancial institutions do not summarize important policies and fee information in a uniform, concise, and easy-to-understand format that allows customers to compare account terms and conditions. The median length of bank checking account disclosure statements has decreased, but is still cumbersome at 69 pages. For credit unions, the median length is 31 pages. Although shorter, credit union disclosures often do not include information that would allow a customer to compare account fees, terms, and conditions.

On a related note, the Consumer Financial Protection Bureau (CFPB) will be making its complaint database public today. The Washington Post indicates the importance of this data:
Complaints are the primary way that most consumers interact with the new agency. The CFPB said it has received more than 45,000 in the year since the bureau was launched. How it handles those complaints — and how much it makes public — has been a source of tension between the agency and financial industry groups.

Continue ReadingWhy 69 is obscene.

Modern credit card agreements: 29 pages of “tricks and traps”

Elizabeth Warren, the TARP Oversight Chair was on the Rachel Maddow's show discussing the aggressive anti-consumer practices of credit card companies, and warning that the credit card industry is about to try to kill federal efforts to regulate the industry. She reminds us that in 1980 a credit card agreement was only about a page long. Now credit card agreements are 30 pages long, full of "tricks and traps."

MADDOW: Are you worried that the [credit card] industry's going to be about to kill [credit card reform legislation] in the crib? Reporting is that it's their top priority to get rid of it. WARREN: My gosh! I have to tell you, it's like they're stampeding in the halls already in Washington. the Gucci loafers. These guys have built up a huge war chest, they've been interviewing public relations firms to see who can come up with the next Harry And Louise ad to explain to the American people why they're better off with credit cards that nobody can read, hundreds of pages of mortgage documents that nobody can read...the idea is you're better off with how things are...forget all that stuff the happened over the last few years. And we promise to keep things up just like we did before. I just can't believe they're trying to sell that to the American people.
You can read much more on this topic at Jason Linkins' post at Huffpo's new Lobby Blog.

Continue ReadingModern credit card agreements: 29 pages of “tricks and traps”

What Americans owe on their credit cards

What do Americans owe on their credit cards? A huge aggregate amount that constitutes a ticking time bomb that could further devastate the economy. Here are the details, from Consumeraffairs.com:

Average bankcard borrower debt, defined as the aggregate balance on all bank-issued credit cards for an individual bankcard borrower, inched upward nationally 0.82 percent to $5,776 from the previous quarter's $5,729, and 4.09 percent compared to the first quarter of 2008. The highest state average bankcard debt remains in Alaska at $7,476, followed by Tennessee at $6,869 and Nevada at $6,677.

This is per individual bankcard borrower. For the average debt of a married couple, then, double the average amount. The same site reports that the number of consumers who are three or more months behind on their credit card payments is up 11 percent over the same period from 2008.

Continue ReadingWhat Americans owe on their credit cards

Democrats: not the party for economic reform

In an article titled, "The Trouble with Democrats," William Greider of The Nation documents the many ways in which the democrats lack the moral will to rein in predatory lending and enact real economic reform. How about modestly adjusting the bankruptcy code to allow 1.5 million people to keep their houses? Forget it. How about capping payday loans at 35%? No way. You see, most Democrats are scared of payday lenders unless the interest cap is 390%. How about putting meaningful rate caps on credit cards? No way, because the financial services industry doesn't want that. This article is a thoroughly disgusting review of Democrat spinelessness and a reminder about who pulls the strings in Washington. Hint: it's not The People.

Continue ReadingDemocrats: not the party for economic reform