tagged w/ Credit Card Abuses
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The nation's second-largest bank said a new law that limits unfair rate hikes and hidden fees will cost it as much as $750 million a year.
JPMorgan Chase revealed the estimate Monday in a regulatory filing:
In addition, as a result of the recently-enacted credit card legislation, management estimates, which are preliminary and subject to change, are that Card Services' annual net income may be adversely affected by approximately $500 million to $750 million. As a result of all these factors, management currently expects Card Services to have a net loss for the full year 2010.
The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 bans or limits deceptive and unfair practices, including retroactive rate increases, late fee traps like weekend deadlines and "universal default," or raising rates because of a borrower's delinquency with another lender.
The law gives the industry until February 2010 to comply with most of the rules, but since many banks started to jack up interest rates in advance of enactment, Congress is now considering moving up the date to December. The Federal Reserve cautioned Congress against it.The nation's second-largest bank said a new law that limits unfair rate hikes and... more
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Gordon Hageman couldn’t believe the credit card offer he got in the mail.
"My first thought, it was a mistake," Hageman said.
The wine distributor called the number on the offer, gave them the offer code and verified his information. Sure enough, it was right: the pre-approved credit card came with a 79.9 percent APR.
Yes, 79.9 percent.
The offer is for a Premier card from First Premier Bank, which is based in South Dakota. On its Web site, First Premier says it is the country's 10th largest issuer of Visa and MasterCard credit cards. The site also says it "focuses on individuals who have less than perfect credit but are actually still creditworthy."
"I think they’re trying to take advantage of me," said Hageman.
Ya think?
Hageman acknowleged that his credit isn't perfect, but he said it's about average. He said the pre-approved offer didn’t mention the actual interest rate on the card -- for that, he had to read the enclosed fine-print disclosure.
"I think you’re beginning to border on deception there," San Diego State marketing professor Michael Belch said.
Belch said the card is offering a bad deal to people who are desperate.
"They're just finding different ways to gouge the consumer," Belch said.
The California Attorney General's office said there's nothing it can do about the cards since they are issued out of state and out of its jurisdiction.
A spokesman with the Federal Deposit Insurance Corporation (FDIC) said interest rate limits on bank cards are set by the individual state and not on a federal level. According to information on the South Dakota Legislative Web site, there is "no maximum or usury restriction." In other words, the individual bank can set its own interest rate limits.
Several calls made to First Premier for a comment were not returned.Gordon Hageman couldn’t believe the credit card offer he got in the mail.... more
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Target: U.S. Senate
Sponsored by: Consumers Union
Unfair consumer practices led to the biggest financial crisis in a century; don't let it happen again! Stop credit card companies from taking advantage of devastated consumers.
A strong credit card reform bill has already passed in the House of Representatives, but now the Senate needs to act. The proposed bill would force credit card companies to act ethically by:
* Stopping companies from hiking interest rates on existing balances.
* Stopping them from applying your monthly payment to low-interest debt first.
* Giving you time between the bill and the due date so you can always pay on time.
* Stopping interest charges on debts paid off the previous month.
Support reform that will stop unfair corporate practices and protect Americans from a financial meltdown. Tell the U.S. Senate to stand up for the rights of American citizens and pass the Credit Card Act.Target: U.S. Senate
Sponsored by: Consumers Union
Unfair consumer practices led to... more
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