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Warren to review card agreements

By Leslie McFadden · Bankrate.com
Monday, September 20, 2010
Posted: 2 pm ET

Elizabeth Warren, the recently appointed assistant to President Barack Obama and special adviser to the secretary of the Treasury on the Consumer Financial Protection Bureau, or CFPB, will oversee "all aspects of the bureau's creation," President Obama said last week during the announcement of her appointment. In addition, he said that she would play a "pivotal role" in the selection of the director of the bureau.

The new position lets her avoid a Senate confirmation battle to run the CFPB, the creation of which is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act that became law in July. It will be an independent agency within the Federal Reserve, and act as a watchdog over consumer financial products such as mortgages and credit cards.

Obama credited the Harvard Law professor with proposing the idea for the bureau, and called her "one of the country's fiercest advocates for the middle class." She was previously chair of the Congressional Oversight Panel, which oversaw the Troubled Assets Relief Program, or TARP.

President Obama said the bureau will enforce the rules of the new credit card law, and "ensure that every American receives a free credit score if they are denied a loan or insurance because of that score."

As reported by Bloomberg, one of Warren's first priorities in her new role will be revising credit card agreements, which she called "long" and "hard to read."

"The time for hiding tricks and traps in the fine print is over," Warren wrote Friday in The White House Blog. She said that people should be able to read their credit card agreements and "know the deal."

Since July 2010, new disclosure rules have required credit card issuers to provide new customers with a one-page agreement summary. The card agreement itself can still span more than a dozen pages full of fine print.

Talk back: Do credit card agreements need a makeover?

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7 Comments
JOE B
September 21, 2010 at 11:33 pm

HOW CAN ELAN FINANCIAL SERVICES RAISE THEIR CC RATE 4% FROM A FIXES RATE I HAD FOR 8 YRS TO A VARIABLE 4% MORE--IF THIS ISNT BAIT AND SWITCH WHAT IS----MY CURRENT BALANCE SHOULD BE HELD TO THE ORIGINAL FIXES OF 8.9--WHATS TO STOP OTHERS FROM RAISING RATES ON HIGH BALANCE CUSTOMERS ALREADY STRUGGLING----JUST GIVE THE ALL A WITHDRAWAL SLIP TO THE CUSTOMERS ACCT---JUST A BUNCH OF SHISTERS IN NICE SUITS

jACK rOONEY
September 21, 2010 at 3:26 pm

Yesterday I got word that my Schwab credit card would become a FIA=BankofAmerica card on October 1. Ten days notice. What will Professor Warren have to say about that? I guess it was too good to last. How's that Fidelity credit card doing?

Bill
September 20, 2010 at 8:11 pm

All agreements changes(Credit cards, banks, insurance) need to be coded where reduction in services and increases in costs are underlined (or in red). Increases in service and decreases in cost are in bold (or green). Minor changes are in italics or strikethroughs.

This would involve no more work for the service provider, because their accountants and lawyers have to do this anyways.

But it would make changes to the documents very transparent.

Having things shortened would be nice, but I think the companies could argue that this is difficult given the legal implications of not spelling everything out in its full legal terms.

Bob Berry
September 20, 2010 at 3:49 pm

Its about time the credit card agreement was exposed to the light. Great move..