If you thought credit card companies were bad before, you ain't seen nothing compared to the abuses to come as a result of the new Credit Card Reform Act. According to industry representatives, the new regime will force credit card companies to come after prime borrowers, restrict access for the young and non-prime, do away with rewards programs, and up annual fees. In short, they're going have to raise hell until lawmakers repent.

Following the passage of the new legislation, commentators of all stripes weighed in on the topic. Consumer groups and some on the left praised the law as a definitive win in the on-going struggle between ‘Wall Street and main street'. The plastic card industry and some on the right decried the measure as ‘anti-competitive' and an affront to the concept of personal responsibility.

Although the competing parties agree on little, the commotion surrounding the new legislation suggests that one point is not a matter of contention: the consumer credit industry is about to undergo dramatic changes.

Unfortunately, this, the one point of agreement, is where the real debate should occur. I'm here to tell you that this is a bluff both legislators and individuals should call.

Think about it: the changes proposed by the credit card industry are a model for self-destruction. On the one hand, they say they are going to stop issuing cards to the poor and the young (and especially the poor and young). These are the people least likely to pay off the full balance in time, and thus, the people most likely to generate profit margins.

To make up the lost revenue, credit card lenders are also proposing to squeeze the prime borrowers who, in the words of one industry watcher quoted in the New York Times, have been "making out like bandits". Unfortunately, these are the very people that don't need credit cards. Start raising rates and charging annual fees and these people will be cutting plastic faster than an environmentalist at the six-pack ring factory. Rich people will go from three cards to one, or none, faster than you can say Djibouti.

Give it six months to a year, and we'll end up with a credit card market completely oversaturated by lenders. I don't think it will even get that far, but if it does, it won't stay like that for long. Eventually, the credit card lenders are going to have to make some money, even if it's in a less usurious fashion than before. To the extent competition exists at all anymore, one card will undercut the rest, and eventually everybody will have to follow suit. How do you think things like rewards programs developed in the first place?

In the end, we'll be back to where we started, albeit with slightly less sneaky tactics. So I guess the whole point of this blog was to say that all the fuss over the Credit Card Reform Act was about nothing. (Ironic? Yes.)

On Friday May 22, 2009 President Obama approved new credit card legislation which makes it tougher for credit card companies to raise fees and interest rates on consumers. The legislation seeks to address what many Democrats and consumer groups believe are abusive practices by credit card companies. "With this bill we are putting in place some common sense reforms designed to protect consumers," Obama said at a signing ceremony at the White House. "We're not going to be giving people a free pass and we expect consumers to live within their means and pay what they owe. But we also expect financial institutions to act with the same sense of responsibility that the American people aspire to in their own lives," he said. While many are calling the legislation a victory for the average consumer, others are worried that the new provisions will punish consumers with good credit who pay their bills on time. Banks and credit issuers argue the law will inevitably force them to drop at risk holders and raise interest rates overall.

Here are some of the key provisions of the bill provided by the Associated Press:

•Bans double-cycle billing, which is a method of calculating finance charges that takes into account the previous month's balance in addition to your current credit card balance.

•Prohibits retroactive rate increases unless the cardholder is at least 60 days behind in paying the bill. If a person does fall behind and the rate on past buys is increased, lenders must restore the lower rate after six months if the cardholder has paid monthly bills on time.

•Requires lenders to post their credit card agreements on the Internet.

•Requires that customers receive 45 days notice before rates are increased.

•Requires anyone under 21 to prove that they can repay the money before being given a card, or have a parent or guardian promise to pay off their debt if they default.

•Prohibits over-the-limit fees unless a cardholder elects to be allowed to go over a limit.

•Requires lenders to say how much time it would take and how much money in interest would be paid if only the minimum monthly payments are made.

•Requires that gift cards remain valid for five years.

*Additionally, an unrelated amendment allowing visitors to carry licensed guns in national parks and wildlife refugees was also included and approved. The provision permits guns if allowed under state law. There is essentially no relationship between the gun amendment and the credit card legislation.

Some of these provisions were already put in place by the Federal Reserve last December, but they weren't scheduled to kick in until July 2010. Instead, the 45-day notice will now go into effect in mid-August of this year, with the rest of the changes being implemented next February.

John Mattes of San Diego 6 recently interviewed UCAN attorney Art Neill regarding new Credit Card Legislation.

 Federal stimulus checks in the amount of $250 are on the way to senior citizens and others who receive Social Security and other federal benefits, but to no one's surprise, the scam artists are slithering out from under their rocks with schemes to grab the cash -- and worse.

The one-time payments, authorized by Congress, will be delivered the same way those who receive benefits normally get their checks -- by regular mail or Direct Deposit.

Con artists have devised a number of ways to extract the money from seniors -- some with even more ominous motives than just stealing the money.

They're sending mail stating that bank account information is needed in order for the person to receive their check.  NOT TRUE!

They're working the phones telling seniors they need to give out sensitive information like bank account numbers and Social Security numbers in order to get their payments. NOT TRUE!

They're sending e-mails with links for people to find out if they qualify. NOT NECESSARY!

The facts are that people who are eligible for the payments, do not have to do anything to receive them. No one should be contacting them about the payments.

UCAN advises everyone -- NEVER give out sensitive personal or financial information unless first checking on the source that is asking for it.

If you think you are eligible for this one-time payment, and haven't received it by June 4, contact Social Security at 1-800-772-1213.

If you get something suspicious in the mail, online or receive a suspect phone call, get in touch with Social Security's fraud hotline at 1-800-269-0271 or go online to www.socialsecurity.gov/oig/hotline/. 

These payments were designed to give seniors -- not crooks -- a boost during these tough economic times.

UCAN has some information to pass on to you about how to complain about the property tax reassessment letters many residents have been receiving recently.  If your letter came from a PO Box in Los Angeles, the L. A. Department of Consumer Affairs provided us with the letter they are sending to all applicable consumers.  This letter provides you with specific information, instrucitons and a contact phone number.  By filing complaints with our city and state agencies, we provide the documentation they need to investigate and prosecute, as needed:

Dear Homeowner:

PROPERTY TAX REASSESSMENT SERVICES

Thank you for contacting us about the solicitation you received from a property tax reassessment service. With the recent decline in property values, many companies are sending these kinds of solicitations to take advantage of unsuspecting consumers.

Be aware that you do not need to pay a company for these services. The Los Angeles County Assessor's office has reviewed over a half-million Los Angeles County properties bought between July 2003 and June 2008 to determine if they need to reduce the assessed value due to falling home prices. This was done free of charge.

The Assessor's office will send letters by the end of June to all 500,000 owners whose homes were reviewed to notify them of the results. If the home qualified for a reduction, the Assessor will reduce the value of the home and notify you by mail. Check the Assessor's website at assessor.lacounty.gov to see if your home was part of the review.

If your home was not part of the review, you can submit a Decline-In-Value Reassessment application to the Assessor's office free of charge. Contact the Assessor at (888) 807-2111 or assessor.lacounty.gov for the application and more information.

California law requires that mailings like the one you received must clearly state they are NOT from a government agency. These letters often look official and are written with deadline warnings that consumers mistake for a real government form. The Los Angeles County Department of Consumer Affairs is investigating these solicitations and will take appropriate action.

If you have already paid these fraudulent companies, call the Department of Consumer Affairs' Real Estate Fraud Program at (800) 973-3370 to file a complaint.

Thank you for bringing this matter to our attention.

Sincerely,