Find the best credit card offers online.It seems that the credit card crisis is waking up the government on the current fiasco that is its financial regulation arm. Recently, President Barack Obama announced plans to create a separate agency which will focus on protecting consumers from the questionable practices of banks and creditors.
The current move of the president is likely a reaction to the outcry of the card carrying project against the unfair practices of banks and creditors which included, among others, unfair and arbitrary interest rate and fee increases, predatory credit card practices targeted to subprime borrowers and cryptic credit card bill and contract language.
Currently the regulatory arm of the government that is taking responsibility for protecting cardholders are its financial regulators who are in charge of banks, lending companies and other financial companies. This is a very conflicted position for the regulating agency as their main purpose is to ensure that investment companies, banks and insurers are able to generate enough profits so that they don’t collapse but flourish instead.
In a new bank oversight plan presented recently, President Barack Obama underlined the situation, referring to it as a “potentially conflicting mission”. According to the plan, which runs 85 pages long, there are already multiple existing agencies which carry authority over the protection of consumers. However, the rules that these agencies follow show several large weaknesses and gaps that could endanger consumers. The president considers the existing system to be inefficient and weak, allowing credit companies and lenders to sell consumers unsuitable and overly complicated loans to borrowers who could not really afford them. In the end, the ensuing large unpaid debts sparked the credit crisis which had a very large impact in slowing down the economy.
To correct the situation, President Obama is proposing a separate Consumer Financial Protection Agency. The agency would be in charge of consumer protection. It would create national standards for consumer protection and work closely with the Securities and Exchange Commission as well as the Federal Trade Commission.
Many observers are taking this as a very positive step by the government, especially those who are at the forefront of the credit crisis. Lance Haver, a consumer advocate of the Philadelphia city government frequently encounters homeowners complaining against ballooning mortgages and credit cardholders complaining against jacked up rates and fees. He is all for the formation of the agency.
“I’m hoping the [federal] agency will be given prosecutorial powers and have the ability to force institutions to compensate consumers”, he said.
