Two weeks to cut rates, card issuers told

[tbyg52]

Source: The Independent

Credit card giants have been given two weeks to agree to stop charging exorbitant rates to borrowers or risk losing their operating licences.

Ministers said they were giving Britain's major lenders one last chance to prove they were not profiteering from the downturn. The ultimatum was delivered at a four-hour Whitehall summit called after The Independent disclosed some credit card and store card providers had raised interest rates – in some cases to 30 per cent – even though the cost of borrowing had fallen.

The credit card companies agreed last night to give borrowers who run into trouble paying their bills a "breathing space" of up to two months before they face action. They also pledged to draw up a clear "statement of principles" over their rates by 9 December. It will commit them to give clear information to borrowers, not alter rates constantly and charge "proportionate" levels of interest.

Lord Mandelson, the Business Secretary, and Gareth Thomas, the Consumer Affairs minister, told leaders of the industry that they were alarmed by lenders increasing their rates overnight without justification.

Read more: http://www.independent.co.uk/news/uk/politics/two-weeks...

---

Sounds like a plan to me - may we have the same here, please?

[lligrd]

1. To Heck With Allowing Them To Do It Voluntarily

Why aren't laws passed limiting what they can charge?

[napi21]

2. What ever happened to usery laws? n/t

[IndyOp]

6. Tricky Dick happened to usury laws - they were repealed during the Nixon years. (n/t)

[SOS]

20. Nixon?

The Marquette Supreme Court decision of 1978 effectively ended state usury laws.

http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=...

[IndyOp]

29. My statement re: Nixon and usury laws comes from Thom Hartmann -

I've heard this mentioned on his show several times and I think Thom is reliable - not perfect, but generally reliable. I am sorry that I can't give you a reference to any action by the Nixon administration that contributed to the weakening or repeal of any usury laws. Could there have been federal usury laws that fell before the Marquette decision effectively ended state usury laws?

[Acadia Blue]

37. The republicons got rid of them. Support the rich is their motto.

[RUMMYisFROSTED]

3. Prime+5

[tbyg52]

5. Oh, I agree. But even what's decribed in the story is more than we are getting here! nt

[Donkeykick]

10. You know what?

Sooner or later they're going to have to. It's really too bad when laws have to be passed explaining this to what should be "logical minded capitalists".

For Example: You should not have to explain to "logical minded bankers (capitalists)" to not make loans to people that are only making $40,000.00 a year that wishes to purchase $200,000.00 houses.

[lligrd]

11. But You Do On Greedy Minded Capitalists

And that is what they are.

[rhett o rick]

15. Capitalists are like kids in a candy store. If they only take one piece there will be plenty to go

around. Good luck with that. Many of the kids would be fine with that until greedy Gary starts filling his pockets. Then look out.

[MJJP21]

33. Doesn't sound voluntary

if they gave them two weeks.Lets see if the Brits follow through on the threat. Somehow I have more respect for their ability in financial matters than the US.

[jazzjunkysue]

4. NY state is toying with a 4% school budget increase cap. But not for Visa

Screw the kids, but, don't you dare threaten capitalism. That's sacred.

BTW- For anyone who cares- a 4% cap will end all after school activities, all music, fine arts, theater, and anything else that's not curricular or mandated.

But, who cares? They're only kids.

[Art_from_Ark]

36. That's terrible

Meanwhile, here in Japan most junior high and high school kids are involved with one sort of after-school activity or another, and fine arts are generally included in the curriculum in at least the elmentary schools.

[hvn_nbr_2]

7. Bush counters with demand that credit cards use income-inverse proportional rates

In related news Bush demanded that credit card issuers use a "progressive" interest rate: billionaires pay 1% on their credit cards, millionaires pay 3%, everyone else pays 80%. Paulsen said that if Congress doesn't approve a $30 trillion bailout to pay the billionaires' interest, martial law is almost certain.

[rhett o rick]

16. Really??

Good post

[MindMatter]

8. Now that's what I'm talking about

When the UK came with their bailout, they attached strings that the money had to be used to make new loans and could not go for executive bonuses, parties, and buying up other companies. The fact that none of these requirements has been in any of Paulson's plans before or since tells us everything we need to know.

Not another dime to these bastards until we get some serious covenants from them in return.

[Sarah Ibarruri]

9. This is being done in the UK, not here - Why isn't it being done here?

I don't understand why this country has to be the exception in everything (and not the exception in a good way).

[niceypoo]

28. US/GOP style capilalism is kleptomania

Steal what you can, while you can.

[pattmarty]

12. Ha, ha, ha, that happening here in the US? That REALLY.......

.....is a good joke. Merry Xmas and happy holidays and may you pay 36% on all your CHRIST-mas purchases.

[femrap]

13. Capitalism used to be called

a 'dog eat dog' type of economic system where businesses competed for the customer's $. Now, it's 'dog eat customer.'

My hope is the Marx was right and capitalism contains the seeds of its own destruction. I like the concept of co-ops.

Anyone else see that Prince Alwaleed bin Talal on CNBC? He's the biggest shareholder of Citigroup. Makes me sick.

[Patiod]

14. And there's no credit card competition

How many issuers are there now?

[snot]

34. Actually, the revival of lay-away may be just that -- competition.

[rhett o rick]

17. Capitalism will eventually take itself out, but it will take all of us out first. The middle class

in this country, collectively has a lot of money. Capitalism won't die until that pool of money is transferred to them. Hyper-inflation would get it done in a hurry.

[femrap]

39. Yep....or maybe they just

devalue the dollar?

[Bluenorthwest]

18. We need this sort of thing

here at home, at once.

[Joe Chi Minh]

19. Is a whole two weeks really necessary? I was told by my local Citizen's

Advice Bureau (an organisation staffed free of charge by voluntary professionals in law, accountancy and other fields) to stop making my payments, since it would only raised false hopes in their minds (I had retired on health grounds on a reduced pension). The debts are unsecured and have now been passed on. I'm fortunate to live in Scotland where harrassment is minimal.

[Skink]

21. Why does the electric co. charge a dollar for late payments and credit cards 39 bucks...

for one day late.

[Stuff213]

22. I think its time to treat credit card companies as national security threats.

[tbyg52]

32. Hey, Stuff213!

Welcome to DU!

[kaygore]

23. If only our government looked out for people

[Vinca]

24. This needs to happen in this country ASAP.

Some of the rates these outfits charge are usurious.

[Riverman]

26. CREDIT CARD DEBT WORSE FOR AVERAGE AMERICAN

FAMILIES THAN OTHER DEBT! IT IS WHAT IS CRUSHING THE ECONOMY AND PUSHING FAMILIES OVER THE EDGE. MAKING $400-$-500 PER MONTH JUST IN INTEREST PAYMENTS DOES NOT ALLOW FAMILIES TO GET AHEAD AND THUS WILL NOT SPEND MONEY ON OTHER CONSUMER PURCHASES. IF THE BIG BRAINS AROUND OBAMA WANT TO START TO FIX THE US ECONOMY THEY MUST SLAM THE CREDIT CARD ISSUING BANKS TO CUT RATES THIS WEEK TO FED COST OF FUNDS PLUS 1% AND NOT ALLOW INCREASES IN INTEREST RATES FOR FIVE YEARS AND THEY MUST CUT THE COST TO BUSINESSES WHO ARE CHARGED FOR ACCEPTING CREDIT CARDS FROM CUSTOMERS.

[Hawkeye-X]

25. and 30% is usury. Cut it to 10.99 or ELSE.

[pa28]

27. U.S. should follow suit but probably won't.

God bless America. We'll continue to send the banks Billions which they sit on or use as equity capital. BTW I just got a note from my CC company saying they will increase my rates to 29% unless I opt out. Be sure to read the fine print when you get mail from the bank!

[enpassant]

30. What happened with H.R. 5244

The credit card holders "bill of rights". It easily passed the House of Representatives just days before the $700 billion dollar bank bail out. The vote quite clearly went along partisan lines with the Republican's being against it, of course. I think it somehow ended up being stalled in Senate session. Not sure.


The bill enjoys hugely popular public support. Getting this thing passed without butchering it to death would demonstrate that the Democrats are indeed agents of change. The taxpayers need representation, not just the corrupt and incompetent banking industry.

[Vidar]

31. Crap, I thought this was the US. Britain is still a civilized country.

[soothsayer]

35. but in the uk they can force you to sell your house if you default on your credit card.

[Anarcho-Socialist]

38. No they can't

Credit cards are unsecured loans.