All of the effort President Obama has put into financial reforms: the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Credit CARD Act of 2009, could be in danger if Mitt Romney is elected the new President.
Mitt Romney and other high profile members of the GOP oppose the attempts to regulate the credit card industry Obama has made.
Facts and Information – for cardholders – on the two legislations:
The Dodd-Frank Reform – signed into law by President Barack Obama on July 21, 2010
- Wall Street has deeper regulatory changes, stronger transparency of financial markets included.
- Consumer Financial Protection Bureau, introduced along with financial products with disclosures with specified standards
- Bail-outs and dissolution of bankrupt companies, coordinated by the government, at the discretion of the Federal Reserve in “unusual or exigent circumstances”
- Tightened regulations and improved accounting of credit rating agencies
The CARD Act – signed into law by President Barack Obama on May 22, 2009
- Additional transparency to monthly statements of credit cards
- Universal Penalty and Late fee structure setup, including for first violation $25 and second $35 within the next six months. Prohibition of involuntary overlimit fees
- Increase in interest rates permitted on new purchases, increasing the interest rate on existing balances prohibited unless the cardholder missed two consecutive payments. 21-day grace periods and penalty rates requiring 45 days advanced notice – consumer may cancel the account during this time.
Major Banks saw a cut into revenue streams with the CARD act and Dodd-Frank Law, because they rely on subprime consumers paying late fees and high interest rates to bring in their primary source of revenue.
Mitt Romney discussed how banks could get around these acts when he appeared on CNN months before the CARD Act was signed into law. If made President, Romney will make efforts to free the banks of the Reform and allow them to operate with less regulation and restriction.
Romney and Obama: A Differing View on Credit Card Reform
According to Democrats and President Obama, by instituting these new laws consumers are protected from predatory practices and exploitation by credit card companies and banks.
Additionally, the go on to claim, that with the introduction of new requirements on explaining terms and conditions to cardholders more clearly, the bills will help the credit card industry through fewer consumers defaulting.
Romney and the GOP feel the consumers should act on their own best interest, without the excessive protection, or intrusion by the government. Will the Reform be changed come Election Day? Only time and the election will decide.
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