New consumer protection watchdog promises credit card reform
In a Bloomberg Television interview earlier this month, Warren (right) said she's committed to making sure ordinary Americans can read and understand the agreements they're entering into with their credit card issuers. It's an ambitious goal, since even after legislation aimed at cutting down the amount of double-talk and legalese, credit card agreements are often dense, complicated and full of fine print that can trip you up if you're not hyper-vigilant.
Warren met with bankers last night, though, and pledged to create a program that "works for the financial services industry," according to the New York Times, although she also referred to deliberately confusing fine print and other all-too-common tricks of the trade as "garbage."
Warren also reminded the bankers that, for many Americans, the prevailing viewpoint is that their financial services provider is not on the side of the customer. Consumer advocates are hopeful that Warren will bring a common-sense agenda to the new agency and refuse to be swayed or coerced by the powerful financial services lobby.
At the meeting, Warren promoted an agenda that would make cardholder agreements simple, easy to read and understand. As we've told you in the past, the problem with the average credit card agreement today is that it's written at a 12th-grade reading level, above the average American's ability to comprehend. Some card agreements are so complex they'd require almost six years of college to figure out!
Cutting through the thicket of legalese will be a boon for consumers, US-PIRG's Mierzwinski says. "Professor Warren often says she teaches contract law at Harvard and can't understand her own credit card contract, so how can anyone else?" he points out. Mierzwinski adds that another reform he'd like Warren's bureau to make is to eliminate card issuers' common practice of requiring customers to settle any disputes through arbitration rather than in the courts.