Summary
For the first time in 23 years, the Federal Reserve Board is reviewing Regulation Z, which could result in changes in the Truth in Lending Act. Lenders are pushing hard to relax rules that have cost them millions in lawsuits. Although there may be some changes, many important Truth in Lending rules will remain intact, including the limitation of your liability if a credit card is lost or stolen and your right to contest a billing error.
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If lenders have their way, consumer attorneys warn, the rules on credit-card protections could change in their favor.
So, too, could federal regulations on predatory mortgage lending, closed-end mortgage credit, home-equity credit lines and adjustable-rate mortgages.
Disclosures required under the Truth in Lending Act can help.
But for the first time in 23 years, the Federal Reserve Board is embarking on a complete review of "Regulation Z," which implements the Truth in Lending Act.
Initially, it wants to know what you think about the format of open-end credit disclosures, the content of the disclosures and other important protections.
Consumer attorneys say that lenders will take full advantage of this situation to convince the Fed to relax rules that have caused them to lose costly lawsuits.
"Through a backdoor method of getting around any degree of responsibility, credit cards have uniformly slipped in arbitration agreements," said Barry L. Kramer, a Los Angeles consumer class-action attorney.
Increasingly, he says, these agreements, prohibiting class-action lawsuits, are becoming accepted by federal courts.
Borrowers all could wind up paying 30 percent credit-card rates if disclosure tactics are permitted to go unchallenged in court.
Some say the lawyers make more than the plaintiffs.
However, it can cost $500 to $1,000 if you are forced to go to arbitration in a dispute.
Who is going to pay that kind of money because of a disagreement over a $50 credit-card charge?
The Federal Reserve Board, Kramer believes, could be most effective if it simply prohibited mandatory arbitration provisions.
Elizabeth Renuart, attorney for the National Consumer Law Center, Boston, says that the Fed's
review is not necessarily a concession to the industry.
Requiring a "Schumer Box," which discloses abbreviated credit-card pricing terms on credit-card solicitations, on the final agreement after a credit card is issued.
About the author: Mike Adams is a natural health researcher, author and award-winning journalist with a mission to teach personal and planetary health to the public He has authored and published thousands of articles, interviews, consumers guides, and books on topics like health and the environment, and he has authored and published several downloadable personal preparedness courses including a downloadable course focused on safety and self defense. Adams is an honest, independent journalist and accepts no money or commissions on the third-party products he writes about or the companies he promotes. In 2010, Adams launched TV.NaturalNews.com, a natural health video site featuring videos on holistic health and green living. He also founded an environmentally-friendly online retailer called BetterLifeGoods.com that uses retail profits to help support consumer advocacy programs. He's also a veteran of the software technology industry, having founded a personalized mass email software product used to deliver email newsletters to subscribers. Adams also serves as the executive director of the Consumer Wellness Center, a non-profit consumer protection group, and practices nature photography, Capoeira, martial arts and organic gardening.
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Wednesday, March 09, 2005
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