The message is out to struggling consumers and the Federal Reserve may be sorry they offered a helping hand to the millions of consumers who are drowning in credit card debt and in their homes.
Apparently the Federal Reserve has been inundated with over 8,200 consumer complaints against various banking and lending institutions for credit card abuse and predatory lending. The Fed’s inbox has been full since it invited personal comments regarding a proposed new rule to end “Unfair or Deceptive Acts or Practices.” Sarah Byrnes said, Campaign Manager of Americans for Fairness in Lending (AFFIL)
Here are some of the complaints from Federal Reserves Freedom of Imformation Office:
“I get a form letter from Bank of America that says my interest rate is going to be raised from 7.9% to 21.99%. Why? Because I have a large balance that I haven’t paid off and I carry balances on a few other cards. Never mind that I’m not late, overlimit or anything else that would be a problem.” — Angela, Louisville, Kentucky
“The worst is Bank of America….The worst experience with this card was when I received my statement the other day. There was a $39 late fee on it. I knew that I paid on time and when I called the rep stated that I ‘paid too early’ so that it was applied to my previous billing cycle. Therefore, it was if I hadn’t made any payment in [the] current billing cycle. I have never heard of such a thing, being penalized for paying too soon.” — Eileen, Farmingdale, New York
“My husband and I recently experienced Bank of America raising our interest rate on our credit card from 13% to over 24%. The reason they sited [sic] was because they ‘re-evaluated’ our credit history…. Thankfully we continue to pay all our bills on time but these actions are predatory as I feel like they are in a dark corner just waiting to pounce.” — Jennifer, Fort Meyers, Florida
“Back when the President signed the new bankruptcy law, all my credit cards doubled the minimum payment and at least doubled my interest rates. What was a $100 minimum payment with a 9.99% interest rate went to $200 a month at 28%. I had to open more cards to transfer balances to help pay the other cards. Now I have to file for bankruptcy.” — Tim, Troy, Ohio
From the AAFIL:
“Americans are telling the Federal Reserve Board in no uncertain terms that they have had enough of these tricks and traps. Consumers are demanding strong federal regulations to ban the most egregious credit card practices—doubling and tripling interest rates, applying these higher interest rates retroactively to outstanding balances, imposing exorbitant penalty fees, and requiring binding mandatory arbitration clauses. But many wonder whether the Fed will listen to banks more than consumers and come down on the side of ‘business as usual.’ There’s no doubt that the banks are pressuring the Fed to tone down the proposed changes.
“Our government protects us from unsafe foods and drugs. Shouldn’t we demand reasonable protection against dangerous lending practices that deplete and destroy assets? We believe that consumer voices are what’s missing in the dialogue between banks and the Federal Reserve Board. That’s why AFFIL is helping consumers to contact the Fed during this period through its website http://www.affil.org. The Fed’s invitation for comments remains open through August 4, 2008.”
More information from the Federal Reserve:
- Regulation AA – Unfair or Deceptive Acts or Practices [R-1314 ]
- Interagency proposed rule prohibiting institutions from engaging in certain acts or practices in connection with consumer credit card accounts and overdraft services for deposit accounts
{ 4 comments… read them below or add one }
We are living in a totalitarian tripartite dictatorship, viz Elected, Press and financial.with varying degrees in various countriesThe last sustaining the two former, due to the fact that money is created out of NOTHING as an interest bearing DEBT enslaving us all from cradle to grave.Any other legislation is only cosmetic, giving a semblance of democracy.What is needed is a basic paradigm shift in the Noe classical economics which governed by interest bearing DEBT, get the money lenders out of the market, get the elected government to issue the money towards productive capacity as interest free loans, to be repaid and debt cancelled, hence counter inflationaryThen you will have Free and fair markets.Interest is not necessary or inevitable
my loan company (wells fargo) screwed me a 30 unfixed home loan at closing.i was given a check for a southern bell bill for $250.00( i.d theft) only to find out later they ignored the bad credit charges to get the $42,000.00 down payment. then when i went to refinance after 2 yrs. i was told about the bad credit cards that were there when the loan was made. and with the bad credit now i’m screwed for about 5 yrs. i was told by wells fargo to wait it out. my equitity is twice the amount of the money owed for the home. i will sell my home if i can’t get help soon somewhere. a victum of identity theft
i wish the govt would stop handing out cheap money why bother to save if uncoe sam will bail me out
We have applied for a Loan Modification with Bank of America/BAC. We have never made a late payment but need help now to survive. All of our documents for the Loan Mod have been filed, but no one has called or sent papers saying we have been accepted for the modification.
Then, our regular Nov.’09 payment was sent to BAC on time. BAC received it on Nov., 5,2009 , but held it and didn’t post it until the 19th and then they charged a $192.92 late charge. Although, BAC tells me when I call their Home Retention Dept., that our 3 month trial would begin Dec., 1,2009 with modified payments. I can’t get anything in writing from from BAC actually stating that. So if I send a modified amount for a payment, BAC may do what they did with my Nov. ‘09 payment and put our mortgage into default.
They tell me during phone calls: “your next payment for Dec. ‘09 starts your trial modified payments”. I’m afraid to sent a modified payment after what BAC did to our Nov. payment for fear that BAC will put my mortgage into default . We’ve never made a late payment until BAC caused a Nov payment to be late by not posting it on time. Now, I have received a collection call and been sent a notice of further action if that late payment isn’t paid by Dec. 16, 2009. I’m sure this is criminal action by BAC. Is anyone else experiencing such experiences with BAC??? I don’t know what to do. We seriously need our Modification, but BAC is actually sabbotaging our efforts to obtain one.