"I Disclose... Nothing"

There was an Opinion piece in the New York Times Sunday, Jan. 22,2012 by Elisabeth Rosenthal regarding the matter of Disclosures. Her position is that there isn't any, especially in the Consumer area. The link to the article is shown at the end of this posting. It's worth reading, every word of it!

NOW MY POSTING:

FOR DISCLOSURE PURPOSES ONLY!!!!!!

I am a lawyer. Please do not pillage me for thinking, many years ago, that lawyers HELPED people, and had a high degree of integrity. Even worse, at one foolish time I actually considered getting into politics, again thinking that our elected officials actually care about their constituents.

I come face to face every day, handling foreclosure prevention work, with federally mandated and corporate sought after disclosures like the "[NO] Truth In Lending" disclosure required at all real estate transactions. Unlike many of my brethren and sisteren I actually understand the documents. Having spent 18 years in Banking, at times working for regulatory bodies, and being an attorney, I learned the hidden meanings of the documents. Dan Brown would just be disappointed as would the Incas.

Instead of calling the volumes of paper presented to borrowers of any type disclosures, how about some honesty - call them DISCLAIMERS "NO MATTER WHAT WE DO TO YOU, WE HAVE NO RESPONSIBILITY FOR ANYTHING. IF YOU SHOULD ATTEMPT TO ENFORCE ANY LAWS WE WILL BRING THE FURIES OF HELL UPON YOU".

Unfortunately the last statement is only a mild exaggeration. The law firms representing the lenders and other large corporations can inundate a consumer or her/his lawyer with paper and deadlines.- EXPERIENCE.

No matter what a disclosure states, if there is no regulatory oversight in a meaningful way to protect consumers, the disclosures are worthless. The Tea Party et al who want less government better have an army of lawyers ready.

Most recently a Bankruptcy case involving a foreclosure was decided when the judge rules that all of the required disclosures were given to the borrower - the fact that the lender didn't follow federal guidelines was excused - guideline don't count. DISCLOSURES=OBFUSCATION.

Just remember "Less is More" in many cases

Richard I Isacoff, Esq.

Author's Copyright by Richard I. Isacoff, Esq, January 2012

rii@isacofflaw.com
www.isacofflaw.com

http://www.nytimes.com/2012/01/22/sunday-review/hard-truths-about-disclosure.html?pagewanted=1&_r=1&ref=opinion by Elisabeth Rosenthal

Interest Free Credit Cards? Remember P.T. Barnum!

Credit Card companies have a new pitch - "0% Interest on Balance Purchases & Transfers Until XX/1/2012". The idea is to give you credit, with no interest on the outstanding balance for 12 months. And, as an added bonus, the offering company will even take your balance, on which you are being charged 20% from another card, and let you move it, AT NO INTEREST, for the same period. Sounds too good to be true? It is!!

First, all of these offers looked at closely, contain a "nominal" fee for making the balance transfer - like 5% of the amount of the transfer. That is a one time immediate capture fee, meaning they get paid by increasing your balance by that 5%. One could say that it's still a bargain because it's only 5% instead of 20%. However, if you pay the entire balance off in 3 months, you paid a rate of 20% annualized, versus paying the old card 20% balance off in 3 months which has the same effective rate. Well, same rate so you are no worse off than if you kept the old card. WRONG!

That 5% fee get added to your principal balance because it's a fee, not interest. So, instead of paying interest on $5,000 (which is the amount transferred in this example) you pay interest on $5,250. But you might retort and say, "Hey, I am not paying any interest on balance transfers so I was no worse off, and if I keep the money for the year, I am much better off - 0% on $5,250 versus 20% on $5000". Yes, that's true - well sort of true. You will be paying whatever the interest rate is on cash advances on the $250 "fee" which is a cash advance. However, like they say in the infomercials "BUT WAIT, THERE'S MORE!".

If by some chance you do not pay the entire balance, transfers from other cars and purchases made during the "introductory period" ending on XX/1/2012, the entire balance AND DEFERRED INTEREST, the amount of interest that the $5,000 would have earned the card issuer for the entire year, becomes part of the balance and you are subject to the regular interest rate which can be, SURPRISE, 20%! Even if you pay the $5,000 transfer amount back in full, if you don't also pay the $250 "fee" you will be charged an amount equal to the interest on all of the $5,000.

So if the regular rate is 20%, you will now have an additional bill of $1,000, which you will pay 20% for until that is paid in full. Actually, if there is $1.00 outstanding on your bill at the end of the introductory period, you will find your next bill has $1,000 added to the $1.00 that was missed in your previous payment.

Outrageous, but perfectly legal. When the Credit Card Act was passed last year, it took 5 seconds for the card issuers to find a way to keep there profits high. This is one way. Oh, and as an added treat, this scenario applies to most of the retailers, like electronics stores and appliance stores and any "big ticket item" stores - "Buy now and pay no interest for 1 full year!". When that "1 full year" is up, if you haven't paid the balance in full, expect all of that deferred interest to hit you on the bill you get in the 13th month.

The FDIC has a great website that will take you through this and a dozen other ways cards can haunt you now, even more than before.

http://www.fdic.gov/consumers/consumer/news/cnspr10/new_realities.html

Look, credit is fine; credit cards are useful and sometimes necessary, especially in emergencies. JUST KNOW THE RULES! Read ALL of the mail - even the stuff that looks like junk mail - there may be a hidden $1,000 charge in that envelope.

Author's Copyright by Richard I. Isacoff, Esq., May 2011

rii@isacofflaw.com

http://www.isacofflaw.com/

New Credit Card Regs Effective Today

(See entire posting on this issue at February 10, 2009)

New Credit CARD Act of 2009 rules went into effect TODAY, and the are actually some decent regulations

1. Card Issuers will have to check on the customers ability to repay before issuing cards. Sounds common sense doesn't it! It will be unreasonable, under the new regulation and always has been based on life, for a card issuer to give a card to someone without income or assets, and for a card issuer not to review such information.

2. Before you can be assessed an over-limit fee, you will have to AGREE to allow over your limit charges to be accepted. It is not like so many other programs where you have to say "no" or your in, here if you do not say "YES" you cannot be assessed a fee or penalized in any way if you are approved for an over-limit charge

3. If the Card Issuer is going to increase your rate, for any reason, you must receive at least 45 days notice, and then the increase can only apply to charges/cash advances AFTER the 45 day date. Old balances pay at the old rate of interest.

4. Your rate cannot be increased, in nearly all circumstances, for the first 12 months you have your card. The exceptions include if you get a variable rate card where the interest rate is supposed to go up and down; or if you are more than 60 days late in the first 12 months.

5. If you are under 21, you will have to show that you can afford the payments on your maximum credit limit, or have an over 21 co-signor.

6. Card issuers will not be able to make deals with colleges or high schools to come onto campus to offer cards if the card company offers the school an incentive to let it in.

7. Payment dates must be the same day (1st 4th 8th 27th etc) each month and if the payment date falls on a holiday or weekend, not late fee or penalty can be assessed

8. The new statements must contain information in bold type of the New Balance, Minimum Payment Due, and the Due Date. There must also be a warning of what will happen to the rate and when it will happen if a payment is late. The biggest change in statements is that each month it MUST show how long it will take to pay off the balance at the present interest rate if you make Only The Minimum Payment; AND HOW MUCH YOU WILL HAVE TO PAY, TO PAY OFF THE BALANCE IN 3 YEARS. It must also show how much in total you will pay in each case

9. Credit Card Issuers MUST post their agreements on their websites, have the agreements first approved by the Federal Reserve, and have the Federal Reserve Board post them on the Fed’s comprehensive and advertised Card Agreement Website. (WELCOME TO 2010!)

Note: The full 841 page bill with commentary before final adoption is available at the Federal Reserve’s website but a shortened version along with the long one is at: www.federalreserve.gov/consumerinfo/wyntk/creditcardrules.htm

Others At:

http://www.fdic.gov/regulations/laws/rules/6500-1400.html

http://abclocal.go.com/kgo/story?section=news/7_on_your_side&id=7252770

http://www.youtube.com/watch?v=EGY0jooXIsU&feature=player_embedded

Author's Copyright by Richard I. Isacoff, Esq, February 2010

rii@isacofflaw.com
http://www.isacofflaw.com/

New Credit Card Rules - Finally!

In August of last year some of the new Credit CARD Act of 2009 rules went into effect, saving the most far reaching provisions until February 22, 2010. That’s right, just a few days from now. So, what has Congress in store for us now? Actually some decent regulations

1. Card Issuers will have to check on the customers ability to repay before issuing cards. Sounds common sense doesn’t it! It will be unreasonable, under the new regulation and always has been based on life, for a card issuer to give a card to someone without income or assets, and for a card issuer not to review such information.

Currently, most card issuers just check the credit ("FICO") score, or maybe the score and the recent payment history. NEW: Now there must be policies in place to determine the ratio of debt obligations to income; or the debt obligations to assets; or the amount the consumer will have remaining after paying debts. The card issuer may rely on the information provided by the consumer on his/her application. Otherwise the company will have to gather information on deposits, assets, income - just like a real lender. If you "stretch" your income on a credit application (show more significantly income than you make each month) do not look for the laws to help defend you.

2. Before you can be assessed an over-limit fee, you will have to AGREE to allow over your limit charges to be accepted. It is not like so many other programs where you have to say "no" or your in, here if you do not say "YES" you cannot be assessed a fee or penalized in any way if you are approved for an over-limit charge

Right now, many card issuers love it when someone goes $.01 over the authorized limit because the card company can charge a fee of whatever it wants, but commonly $39. True, you do not get rejected at the check-out counter but, maybe you would want to know before buying a hamburger at McD’s for $1.00 and paying $39 for the privilege.

3. If the Card Issuer is going to increase your rate, for any reason, you must receive at least 45 days notice, and then the increase can only apply to charges/cash advances AFTER the 45 day date. Old balances pay at the old rate of interest.

At the present, if you get a rate increase, your fault for being late too often or because the card company is greedy, the increase applies to all outstanding balances - old/existing and new. Now it will be only on the new activity.

4. Your rate cannot be increased, in nearly all circumstances, for the first 12 months you have your card. The exceptions include if you get a variable rate card where the interest rate is supposed to go up and down; or if you are more than 60 days late in the first 12 months.

Teaser rates - will be nearly a thing of the past. The company will have to disclose the teaser rate period and the actual rate it will charge after that period is up And the teaser period must be at least 6 months

5. If you are under 21, you will have to show that you can afford the payments on your maximum credit limit, or have an over 21 co-signor.

We all know of the horror stories about the 17 or 18 year old high school student who get an offer in the mail, sends back the YES I WANT IT postcard, gets a $7,500 credit limit, and then cannot make the minimum payments after one payment is missed and the rate goes from 5% to 30.99% Will this be annoying? Sure, but it will prevent a good deal of anxiety on the part of those under 21 who got "swindled"/misled/were easy marks. If the under 21 can show that he/she can pay, from a provable source, then the card company is permitted to issue the card.

6. Card issuers will not be able to make deals with colleges or high schools to come onto campus to offer cards if the card company offers the school an incentive to let it in.

Surprised that schools would get kick-backs? Why be surprised - look at college football! If there is any kind of permission given, both the school and the card company MUST disclose all arrangements; any that pay the school will be deemed illegal.

7. Payment dates must be the same day (1st 4th 8th 27th etc) each month and if the payment date falls on a holiday or weekend, not late fee or penalty can be assessed

Credit card companies love changing the day a payment is due to, for instance, "25 days from the date the last payment was received if it was not received late". Who knows when the company receives a payment. Also, weekends and holidays are bonus days for companies because they have earned a great deal of late fees the day after those days.

8. The new statements must contain information in bold type of the New Balance, Minimum Payment Due, and the Due Date. There must also be a warning of what will happen to the rate and when it will happen if a payment is late. The biggest change in statements is that each month it MUST show how long it will take to pay off the balance at the present interest rate if you make Only The Minimum Payment; AND HOW MUCH YOU WILL HAVE TO PAY, TO PAY OFF THE BALANCE IN 3 YEARS. It must also show how much in total you will pay in each case

9. Credit Card Issuers MUST post their agreements on their websites, have the agreements first approved by the Federal Reserve, and have the Federal Reserve Board posat them on the Fed’s comprehensive and advertised Card Agreement Website. (WELCOME TO 2010!)

Note: The full 841 page bill with commentary before fianl adoption is available at the Federal Reserve’s website but a shortened version along with the long one is at:

www.federalreserve.gov/consumerinfo/wyntk/creditcardrules.htm

Others At:

http://www.fdic.gov/regulations/laws/rules/6500-1400.html

http://abclocal.go.com/kgo/story?section=news/7_on_your_side&id=7252770

http://www.youtube.com/watch?v=EGY0jooXIsU&feature=player_embedded

Author's Copyright by Richard I. Isacoff, Esq, February 2010
rii@isacofflaw.com

http://www.isacofflaw.com/