The National Consumer Law Center, or NCLC, a nonprofit advocacy group, has set out an aggressive agenda for the federal government’s new Consumer Financial Protection Bureau. On the NCLC’s wish list are action items for mortgages, credit cards, overdraft fees, prepaid debit cards, debt collection and more.
The items that would take direct hits at banking practices that hurt consumers are as follows, quoted from the complete list:
• Monitor the credit card market to address violations and evasions of the Credit CARD Act.
• Prohibit complicated terms and hidden traps in credit cards, so that consumers can shop for the best card without being hit with back-end surprises.
• Stop predatory marketing of credit cards to struggling consumers.
• Require credit-card companies to disclose an APR (annual percentage rate) that reflects the true cost of a credit card, including all fees.
• Ban aggressive and deceptive tactics to induce opt ins to overdraft fees.
• Limit excessive fees (in number and amount) that far exceed the costs of overdrafts.
• Prohibit bank tactics to increase overdraft fees, such as reordering transactions to cause overdrafts earlier in the day.
• Require banks to inform consumers of less expensive overdraft protection alternatives.
Those objectives sound reasonable since they’re focused on practices that are illegal, predatory, deceptive, misleading, opaque or “gotcha” in nature. The question, however, is how exactly will those adjectives be defined, a matter that no doubt will be the subject of considerable debate as the bureau begins its work.
The possible exception among those otherwise good-sounding ideas may be the last item. Consumers deserve transparent information, but it’s perhaps a stretch to require a commercial business to inform customers of less expensive alternatives to its own services. After all, a supermarket doesn’t have to tell you that generic milk may be cheaper than the national brand.
What’s your opinion of the NCLC’s list? If you were in charge of the Consumer Financial Protection Bureau, what would your priority be?