A mere five and a half years since I started posting about the usurious business practices of consumer credit-card lenders, the new federal regulations on credit card lending go into effect today. Thanks to our most excellent congresswoman Jackie Speier for this link to a summary of the new regulations.
There are still a few loopholes that industry lobbyists were able to get into this law (such as no restrictions on late payment fees), but as a first step, there’s a lot to love here. I’m hoping as a next step we’ll look at a junk mail ban on all types of consumer lenders, but I guess now that corporations have the same free speech rights as natural persons, that’s too much to hope for. Maybe we need a few more debt-generated brushes with the collapse of civilization before we get serious about this kind of thing.
Anyway, I’m very excited to see that elements of the design mockup I did in 2008 made it into the final law. Now, when you receive your credit card bill, your lender has to do the calculation to determine what it will take to pay off your entire balance (both with the ridiculous “minimum payment” and with a more realistic payment that will get you out of debt in three years). I am sure that the credit card issuers will triple the number of frequent-flier junk mails and other inserts to take your attention away from this important part of your monthly bill, but still, it’s a step in the right direction.
The regulated payment notice goes beyond my design in a few effective ways: it describes the minimum payment trap with the word “warning,” tells you how many years the “minimum payment” will keep you in hock, and calculates how much money you’ll save if you pay off the debt sooner.