Consumers, make your voices heard.
Elizabeth Warren, the head of the Consumer Financial Protection Bureau, is asking current and future credit card users to make suggestions for the bureau via its website and social networking sites. The bureau’s mandate begins in July.
The bureau plans on hearing the voices of consumers to develop plans to protect them against the deceptive practices of the financial industry.
Warren has already proved herself as a consumer advocate. She has requested that credit card companies reveal credit limits and interest rates in marketing materials before the consumer applies. She has also asked for all credit card agreements to be written in simple English that all people can understand. For example, the fees and interest rates charged for balance transfers and cash advances do not appear in the same section of the summary disclosure. A change in the language of credit card agreements would put the important pricing information next to the services.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, under which the bureau was formed, promotes “fairness and transparency for mortgages, credit cards and other consumer financial products and services,” according to the U.S. Department of the Treasury.
Currently, when consumers sign up for credit cards, they learn the APR and the credit limit only after they are approved. A card issuer must review an applicant’s credit reports in order to guarantee credit card approval. When this happens, the applicant’s credit score takes a small dip, even if they were approved. But the bureau has not cleared up how credit scores will be affected as a result of impending changes. The bureau is trying to end this cycle of credit card companies taking advantage of consumers.