….than be associated with a sleazy lending practice. As I’m sure all of us would. So I kind of gagged when Ken Clayton, counsel for the American Bankers’ Association (ABA) claimed that credit card issuers are more consumer-friendly and don’t deserve the same scrutiny applied to mortgage lenders. “Credit cards are a highly regulated industry,” Ken Clayton, counsel for the ABA said. “The parallel doesn’t work.”Uh, huh. Please, Ken, don’t remotely connect mortgage lenders with you credit guys — or I’ll have to take another shower. Somehow, I think that if mortgage lenders could arbitrarily raise our clients’ rates for no apparent reason, apply rate increases retroactively, charge interest on our interest, and pull “bait and switch” scams with “pre-approved” offers, half the country would be in default on their mortgages and lending pros would be living with body guards 24/7!Mortgage borrowers are far better protected. Unbreakable agreements (at least on the lenders’ side), rate caps, and clearly spelled out terms and conditions should mean no surprises for these borrowers. And yet misguided folks are missing mortgage payments to keep thuggish credit card companies happy. And the cardholder’s reward? A rate increase when the universal default clause kicks in.
So I for one am happy to see some reform. If these proposed laws take hold and have the effect of keeping payments manageable for homeowners perhaps we’ll see less mortgage default down the road.
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{ 8 comments… read them below or add one }
I’m not sure if this is the same as the CARD Act bill introduced by Sen Chris Dodd, because that’s the one that’s going to become law, considering that Dodd is Chairman of the Senate Banking Committee.
Gina… I agree 120% - don’t even get me started on the auto financing industry and the abuses they are allowed to perpetuate everyday.
This is awesome. Every time I see tables in college union halls signing up 18 year old kids with credit cards I want to throw up.
Gina… I agree 120% - don’t even get me started on the auto financing industry and the abuses they are allowed to perpetuate everyday.
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Something definatley has to be done. All your points Gina are 100% accurate.
In addition, it is to tempting for a large bank that is losing billions on mortgages to simply walk over to thier credit card holders and turn on the cash faucet.
LOL… that’s a good way to put things in perspective.
I agree! How is it that an industry(credit cards) so regulated can pull off the dirty tricks they all play….how many folks have seen multiple cards from the same company on one borowers credit report? what ever happend to increasing the limit on one card? That’s kind of like us as originators booking 3 loans on one property so we could earn 3 different sets of fee’s!!! Mortgage borrowers are better protected for sure and my opinion is that if Mortgage Assistance is what the public needs then get it to them quickly instead of trying to police the originators for the future. Part of the problem is that people need Mortgage help now, not protective legistlation!
Mr. Clayton’s position is curious, because when you dig down you’ll often find the same large financial institutions behind both mortgage and credit card lending. Almost by definition though, the fact that credit card loans are unsecured makes them more open to abuse. A home owner who cannot make his mortgage payment still has an asset (the home) with which to at least partially offset the debt. A credit card holder who cannot make his payments is left with nothing but the debt.
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