Bankruptcy Bill’s Truth-In-Lending “Improvements” Aren’t
Per their web site, The National Consumer Law Center (NCLC) “is the nation’s consumer law expert, helping consumers, their advocates, and public policy makers to use powerful and complex consumer laws to assure justice for vulnerable, low income Americans.”
It appears to be wholly engaged in providing free or low-cost legal services for poor people, and when it has a moment, opines on pending legislation.
Note to “conservatives”–Yeah, they’re funded partially by the Ford Foundation and they’re on the left side of the aisle–and your point is….? Geez, they have a whopping $4 million budget, their tax return says they spent no political money, and y’know, I’m glad somebody’s out there trying to protect people who don’t have the money to pay legal fees. K?
Here’s their critical overview of the so-called “improvements” in Truth-in-Lending disclosures that are part of the bankruptcy “reform” bill (headed “Bankruptcy Bill�s ‘Truth-in-Lending’ Provisions Will Obscure the Truth”):
- The bill promotes misleading information about credit card minimum payments. It requires inaccurate descriptions for consumers of the consequences of making minimum payments while failing to mandate easy access to accurate information about the consumer�s loan balance, interest rate, or minimum payment.
- The bill allows credit card introductory “teaser” rate promotions that don’t place the permanent rate in an equally prominent position and that don’t prevent later rate changes. Credit card teaser rates would not be placed side-by-side with the permanent rate. The bill leaves open the possibility that the introductory rate could be shown more prominently than the permanent rate. Moreover, the bill permits creditors to change the teaser or permanent rate with a change of terms or penalty rate.
- The bill gives creditors license to post inaccurate and hard-to-find rate information in Internet credit card solicitations. Internet disclosures only need to be updated “regularly.” The burden would be on a consumer to contact the creditor to get up-to-date and accurate information. The bill also leaves open the possibility that disclosure information could be posted on a separate page from a solicitation, as long as it is in “close proximity.”
- The major new disclosures provided by the bill cannot be enforced by consumers in court. These limited new protections thus ring hollow and undermine 30 years of effective Truth-in-Lending enforcement.
More detailed info is at the linked page.
If their assessment is correct (and it appears to be), I agree with NCLC. I tell attendees at classes I present that I don’t understsand why the card companies don’t just save all the expense of disclosure and say “we get to do what we want whenever we want to, and there’s almost nothing you can do about it.” (And while we’re not looking they say “Nyah-nyah, nyah-nyah-nyah.”)
Why is the NCLC so strident about “boring” disclosures and penalty rates? See this post; you won’t believe what happened to one consumer.
