The series of financial reform that protects consumer rights against unfair practices of credit card issuers continue to come. Many consumers have claimed that they are still suffering despite the reforms. With the Credit Card Act of 2009, customers have complained that they have paid unknown fees and have also paid high interest rates. The government has heard and is now acting on things to make consumers feel more secured.
President Obama has signed the Wall Street reform bill into a law in July 21. The law creates the Bureau of Consumer Protection as a watchdog agency that would focus on consumer lending and financial services and products which include credit cards. The only problem is the agency will start operating after one year, according to an official of the U.S. Treasury Department during a media briefing. Michael Barr, the U.S. Treasury secretary assistant, says that the creation of the new consumer bureau will take time.
Asked why they have to delay, the process will take time and there will be a lot of things to do. Workers from Federal Reserve Board, Office of Thrift Supervision, Federal Trade Commission, National Credit Union Administration and the Office of the Comptroller of the Currency will have to be transferred to the new bureau to create a working staff. Other than that, the President has to appoint a director for the new agency and the law states that the transfers must occur between six to eighteen months after the signing of the bill. Barr said that transferring the powers and duties to the new customer protection might take a year to complete.
The new bureau will have the power to implement current consumer laws and investigate deceptive and abusive practices of credit card issuers. Furthermore, the bureau is also empowered to write new laws if needed.
With the problems of the unintelligible words used in the card agreements, the bureau will be enforcing laws to require the banks and credit unions to make the text comprehensive or easy to understand. Type fonts and sizes should also be changed so customers can read them easily.
It was found out that the agreements are authored on a grade 12 reading level which is higher than the average grade 9 reading level of adult Americans.
Consumers have opined that the hard to understand words of the contracts are meant to confuse and deceive customers. The new bureau might be ordering the card issuers to change some difficult words and make their agreements shorter.
The new law called Dodd-Frank Wall Reform and Consumer Protection Act is said to be the hardest financial reform to be created since the Great Depression. Barr says that it is part of the American people`s victory. When asked about who might be running for the financial protection czar position, Barr says that the decision is up to the president. Reports state that Barr may be one of the names in the candidates list and he may be running with Professor Elizabeth Warren of the Harvard University.