Supreme Court gives states rights to protect consumers
Filed under: Credit
The Supreme Court opened the door for states to enforce fair-lending laws and other consumer protection measures when it struck down a rule that limited such powers to federal banking regulators Monday.The court decided that rules issued by federal banking regulators back in 1864 under the National Bank Act could not block or pre-empt efforts by the states to enforce their own laws.
This state's rights issue was probably won as Justices remembered the abusive banking policies that were ignored by the Fed and other regulators as the housing bubble inflated.
The case was started in 2005 by then New York Attorney General Eliot Spitzer when he began an inquiry of several national banks including Citigroup, JP Morgan Chase and Well Fargo. He told the banks that he saw "troubling" disparities in minority lending that made it appear as though black and Hispanic borrowers were being charged disproportionately higher interest rates on mortgages compared to those for whites.A banking trade group and the Office of the Comptroller of the Currency brought suit to block Spitzer's inquiry. They took the position that the Bush administration in 2004 gave that kind of law enforcement authority to the comptroller and prohibited such efforts by the states.
Prior to this Supreme Court ruling, state governments had little power to enforce consumer-protection and lending rules, but that won't be true any longer. States can't do the kind of inquiry Spitzer started, but they will have the right to take national banks to court to protect consumer rights.
In a 5-4 decision, the Supreme Court concluded that state attorneys general can go after national banks on matters related to unfair lending practices or discrimination.
Maybe the states can start to protect consumers from the unfair credit card lending practices that seem to be getting worse by the day as credit card companies raise rates in a rush to beat the February deadline for the new credit card laws.
Lita Epstein has written more than 25 books including "The Complete Idiot's Guide to Improving Your Credit Score."
Reader Comments (Page 1 of 1)
6-30-2009 @ 2:01PM
aol is a rip off and slow said...
I wonder could anyone start a little justice now by just NOT PAYING YOUR CREDIT CARDS, who broke their deal with consumers?. I wonder if in about 90 days you might just see offers to settle for about 2/3 what you owe, and at about 6 months in about 50%, and after that I wonder might you just be able to write your own deal? Who knows? Does anyone else wonder about this stuff?
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7-01-2009 @ 7:17AM
Donovan said...
I'm not sure this will even stop the credit card issuer's from their deceptive, unethical practices against consumers.
AMX sends me a love letter stating my line of credit has been reduced from $10,000 to $3,300 Ok fine, so I asked why after 14 years of a perfect payment history with them. AMX response was they felt I might have a problem being able to make future payments. I said what? I have never carried a balance over $2,500 I've never had a late payment. Then the CSR said it was due to information they received from Experian on my credit report. Ok fine. I'm able to view all 3 of my credit reports any time I choose. So I bring up my Experian credit report. Nothing wrong, credit score still over 700 no adverse data at all. I call AMX back. And avail them of what I just reviewed on my report.
This next CSR tells me, O' it has nothing to do with information on your credit report. Its the economy, and we have so many account holders defaulting on payments we're cutting thousands of account holders lines of credit. OK fine. I understand. Then I asked if my APR rate was going to be increased from 9.99% she stated O' no your APR will remain the same. I told her thank you, and ended the conversation.
The following week I receive another love letter from AMX, Dear card holder, please be advised your interest rate will be amended from your fixed 9.99% to 12.99% + prime as of your July statement.
Called AMX and spoke to CSR # 3 And asked why my APR rate is going to go higher. She said, we had APR rate increase's back in January. However, for some reason we missed raising yours at that time. I said WHAT? @#%%#@ Well in that case I would just prefer to opt out. She said AMX does not offer their account holders an opt out option. Either accept the new terms, pay the balance in full, or close the account. End of conversation.
No opt out option, nothing.
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7-01-2009 @ 6:41AM
Donovan said...
Well I for one will be filing a complaint with both the OCC and my Stats Attorneys Office. And copies of my love letters I received from AMX will be accompany my complaints.
May be a waste of time. But if enough consumers file written complaints with the OCC and their States Attorneys Office. Who knows. It may just help other consumers who are being financially
and unjustly extorted by the credit card issuers/banks.
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