Finally something is done. This is Obama's 4th month in office.
Harvard Professor Elizabeth Warren's work shows that banks are able to addict a large portion people to credit cards and unsecured credit...and if nothing is done society will be hurt by such predatory lending in the long run.
The other day I was at Post Office and right inside is GE Money offering unsecured loans at double digit interest rates - there were people queuing up to borrow...people with children in their 40s. The reason why I gave up my previous phone number was because I was harrassed by telemarketers offering me credit cards....5 times a day. Why did so many Singapore banks hire American CEOs? Because they have the experience to grow the credit card business and unsecured loan business ...i.e. get as many Singaporeans addicted to such loans as possible especially during this economic slump when Singaporeans need money. Citigroup Singapore is making record profits [BT : Citigroup's Singapore business still raking it in]....$1.2B primarily through consumer lending operations. The Singapore govt through GIC or Temasek has interests in these banks and this makes it hard to do the right thing - the right thing that Obama has to do now to rein in the predatory lending practices - the high fees, exorbitant interest rate, the excessive marketing, ...and the 101 tricks banks use to get consumers into debt. The American govt under Obama realises that something needs to be done - yet in Singapore we allow our banks to copy the practices of their American counterparts....the practices that got Americans into trouble. The Singapore govt seems contented to leave all the trouble caused to be handled by a small powerless Credit Councelling Service whose small office you will not find because it is hidden in some small corner of Singapore. I suggest if you have time, go attend one of their talks and talk to the others who turn up - you will be surprise by the large crowd and how many people got into trouble with these cards - you will leave without a doubt that more has to be done in terms of regulation. How can Credit Councelling Service whose goal is to promote responsible use of credit compete with the hundreds of millions banks spend on promoting their products and urging consumers to spend & borrow....banks probably spend more in 1 week than the Credit Councelling in 5 years. We are fighting a losing battle here because the people who are suppose to fight can't get themselves to do the right thing.
Obama to address credit card abusesWASHINGTON (AP):
The White House said on Sunday that it will back congressional efforts to clamp down on credit card abuses in an effort to address the recession's effect on average Americans.The House of Representatives and Senate are considering a credit card bill of rights to limit the ability of credit card companies to raise interest rates on existing balances and to require greater disclosure. White House economic adviser Larry Summers said people need to save more, but that the government also needs to curb credit card pitches that addict people to plastic.President Barack Obama is ``going to be very focused, in a very near term, on a whole set of issues having to do with credit card abuses, having to do with the way people have been deceived into paying extraordinarily high rates that they wouldn't have paid if they knew what they were getting themselves into,'' Mr. Summers said.Mr. Summers said the administration wants to see a better-regulated financial system, encourage savings and eventually get back to a situation where government spending is not a drain on the economy.``Individuals are going to have to save more, that's why savings incentives are so important,'' he said. ``That's why we need to do things to stop the marketing of credit in ways that addicts people to it _ so that our households are again saving, and families are again preparing to send kids to college, for their retirement, and so forth.''Mr. Summers made the comments Sunday on NBC's ``Meet the Press'' while attending a summit of Western Hemispheric leaders in Trinidad and Tobago.