Without referring to the political battle going on around it, the CFPB’s report on its supervisory activity demonstrates the need for a cop on the consumer financial beat.
We’re watching you.
That was the message that Richard Cordray, the head of the federal Consumer Financial Protection Bureau, had for credit card issuers when he spoke this week to the business journalists attending the annual Society of American Business Editors and Writers conference this week in Indianapolis.
Cordray kept his formal remarks short, leaving lots of room for questions from the attending journalists.
I got one in about credit cards, asking, “Just over two years ago, the major tenets of the Credit CARD Act went into effect, so the question is, has it worked? And to the degree it hasn’t, will there be a need for another round of regulation or a CARD Act II?”
My short version of his answer: Yeah, it’s worked. I’m really close to this issue, and while the CARD Act eliminated the worst abuses, more may need to be done. We’re digesting what consumers have to say, and we’d really like it card issuers could come up with card agreements a human can understand.
Here’s the long version, a full transcript of his four-minute answer.
The CARD Act has resulted in many consumer-friendly changes that impact how credit card issuers and banks operate. In response, many of these issuers have taken actions to recoup lost revenue by reducing or removing reward programs and charging extra fees.
Chase recently ran a test in which consumers in Illinois who weren’t Chase customers had to pay a $5 ATM fee when withdrawing money from one of their ATMs, and Texas customers had to pay a $4 fee. This week, The New York Times said that Chase recently ended this test period and has reverted back to the regular $3 ATM fee. A reason wasn’t given for the end of the pilot, but I’m hoping that enough people stopped using them them that the bank got the message and knew they needed to lower their fee again.
For great advice on credit, debt and personal finance, please read on for my top 10 favorite blog posts from the past week.
A recent Wall Street Journal article (that quoted CreditCards.com) says that unpopular bank fees are slowly but surely on the decline. I’ll toast to that! Thanks to the Card Act and consumer discontent with bank fees, the major banks have been trimming their penalty rates and fees. Interest rates aren’t better according to our data, but if you ever pay a credit card bill late or travel abroad, you will find some major relief from these changes.
It’s major that issuers are starting to get rid of foreign transaction fees. Previously, Capital One was the only issuer with that benefit, which is why I carry one with me whenever I travel internationally. The article adds that in this current financial climate, consumers have the power (especially if they have a good credit score) and should consider negotiating with banks when setting up accounts to get more favorable rates and fees.
Keep reading for my list of my top 10 favorite posts from the personal finance blogosphere this week.
I graduated college in May 2007, and I started writing for CreditCards.com that fall. Shortly after beginning my job, I noticed that gas prices began to surge. Then the mortgage crisis emerged and the bottom of the economy fell out. It was quite an interesting time to be in the personal finance industry!
The cost of oil continued to soar throughout the beginning of the recession, and nearly everyone I knew began cutting back on driving in some capacity. Here in Texas, where we don’t have very good public transportation, nobody wanted to pay $4 a gallon unless they absolutely had to. More than ever, interest sparked in carpooling and using public transportation more frequently.
Much to everyone’s relief, oil prices eventually fell back down and stayed there for a long time. Just a few months ago, I noticed the prices climbing again, though I hoped it was just a fluke. It didn’t alarm me too much until the last few weeks, when I have noticed it getting closer and closer to $3 a gallon here in Austin. Then, yesterday, I filled up at $3 a gallon. The horror! I immediately felt a panic and realized that if it keeps rising, I will need to combine errands, budget more for gas, and not drive unnecessarily all over again.
I recently read in Huffington Post that John Hofmeister, Shell’s former president, predicts that gas prices will continue to increase as oil demands rise, and he thinks Americans may be paying $5 per gallon of gas in 2012. If that’s true, that will put a huge dent in many of our wallets.
Read on for my roundup of my top 10 favorite personal finance blog posts from the past week!