Banking reform that hurts the consumer
During the past 2 years of recession many of the bad practices of the banks and credit card companies have come to light creating an unparalleled push for increased consumer protection. All of this new legislature has had one thing in common until now, help the American people.
Despite the fact that my paycheck comes from one of the big players in consumer banking and credit cards, I am a huge fan of some of the legislature that has been passed recently. So far the government has passed laws to limit overdraft fees, reprising APRs on existing balances and universal default for credit cards. These changes will help to protect credit card users from unfair fees and hair-trigger interest rate increases.
Unfortunately some of our senators who have little understanding of the economy and how business work have proposed the creation of a Consumer Financial Protection Agency (CFPA) which in the end will actually hurt the consumer. This new massive government bureaucracy would be all powerful and strip away power from the current, experienced regulators. Its a great idea to try to protect consumers, but when our national debt is increasing by trillions of dollars a year the last thing we need is a bigger government.
The creation of this the CFPA has a provision that makes nationally chartered banks such as Bank of America, Wells Fargo, JPMorgan Chase, Citibank and Capital One required to follow the mishmash of 50 different state laws instead of just the national laws. This will make it difficult for banks and credit card companies to create new and innovative products for customers. It will also significantly increase costs to be compliant with so many different laws, who do you think those costs will be passed on to? And finally it will reduce the amount of credit consumers have access to.
I think that the government should continue to increase consumer protection, but they should do the research to make sure that the legislature they are trying to pass will actually help consumers. If a law isn’t helping consumers and it isn’t helping corporations, what is its purpose?
For questions please contact me at OurCrazyEconomy@gmail.com.
Despite the fact that my paycheck comes from one of the big players in consumer banking and credit cards, I am a huge fan of some of the legislature that has been passed recently. So far the government has passed laws to limit overdraft fees, reprising APRs on existing balances and universal default for credit cards. These changes will help to protect credit card users from unfair fees and hair-trigger interest rate increases.
Unfortunately some of our senators who have little understanding of the economy and how business work have proposed the creation of a Consumer Financial Protection Agency (CFPA) which in the end will actually hurt the consumer. This new massive government bureaucracy would be all powerful and strip away power from the current, experienced regulators. Its a great idea to try to protect consumers, but when our national debt is increasing by trillions of dollars a year the last thing we need is a bigger government.
The creation of this the CFPA has a provision that makes nationally chartered banks such as Bank of America, Wells Fargo, JPMorgan Chase, Citibank and Capital One required to follow the mishmash of 50 different state laws instead of just the national laws. This will make it difficult for banks and credit card companies to create new and innovative products for customers. It will also significantly increase costs to be compliant with so many different laws, who do you think those costs will be passed on to? And finally it will reduce the amount of credit consumers have access to.
I think that the government should continue to increase consumer protection, but they should do the research to make sure that the legislature they are trying to pass will actually help consumers. If a law isn’t helping consumers and it isn’t helping corporations, what is its purpose?
For questions please contact me at OurCrazyEconomy@gmail.com.
Labels: Bank, Bank of America, Banking, Capital One, CFPA, Citibank, Consumer Financial Protection Agency, Credit Card, JPMorgan Chase, Wells Fargo
posted by Credit Card Employee at
9:21 PM
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