Ok, ok, so it has been a couple of weeks. I was pretty good about blogging at least three times a week until I went out of town for a few days. Life has been just crazy busy ever since. Ok, enough with excuses.
Yesterday, the Federal Reserve issued long-awaited proposed amendments to Reg Z (implementing Truth in Lending). These amendments directly govern credit card disclosures. Now, they do nothing about changing the substantive law. This won’t stop lenders from using universal default clauses — it just means they have to tell you about it. The proposed regulations can be found here. At the bottom of the press release this link leads to is a hotlink for commenting on these new proposals. PLEASE comment. I can promise you the banks will.
Of course, the proposed amendments total over 800 pages. Even I am not reading all of that. However, according to the summaries I have read, the amendments will require lenders to:
- reformat and add new content to card disclosures to make them clearer;
- disclose the full impact and duration of penalty rates;
- emphasize the risks of making minimum payments; and
- better explain how fees affect annual percentage rates.
(Quoting, Industry, Congress Take Stock of Reg Z Revamp, American Banker Online May 24, 2007)
As far as substantive changes go, there are currently seven bills pending in Congress to change abusive credit card practices. That is a lot of opinions to get reconciled in one session with a lot of higher profile issues. Yes, we need substantive legislation. Until then, let’s get behind this regulatory action. Go to the Federal Reserve’s web page and leave a comment. Write your Congressmen. Even in this day of lobbyists and campaign contributions, old-fashioned grassroots commentary can still make a difference.
Professor Harell said Reg Z is incomprehensible to anyone. 800 pages of amendments? Give me a break. It would probably be simpler to kill it and reinvent it.
And the last time you heard Prof. Harell mention that maybe consumers needed a little protection from bank lending practices was when? Oh, what a minute. He runs a bank. Uh, huh.