The NYT’s Joe Nocera publishes an excellent email from an unnamed banker predicting an impending (and deserved, he says) collapse in the credit-card industry.
The banks reel in the consumer, charge interest rates higher than those charged by the mob, increase lines without the consumer asking and without their consent, and lure them into overextending. And we can count on the banks to act surprised when they aren’t paid back. Shame on them.
This ain’t exactly Ralph Nader here—this is a banker saying that.
And he’s got a great idea here:
In 2003, Congress passed the Fair and Accurate Credit Transactions Act of 2003. This law was implemented through regulations issued by the Federal Trade Commission in consultation with the federal banking and credit union agencies. It requires all credit card and insurance solicitations to include a disclosure for “prescreened offers.” We are all familiar with them. They are the dozens of credit card offers that are sent, unsolicited, to consumers, usually by mail. The law allows the consumer to opt out of receiving prescreened offers by calling an 800-number.I think Congress did this backwards. Perhaps it could amend the law. The regulation should have required the consumer to opt in, if they so desire, instead of opting out. That would mean that no one would get an unsolicited credit card offer. If a consumer needs a credit card he or she could be given an option to call an 800-number to opt in. Or the consumer could go to their local bank and apply for a credit card in person. Or the consumer could go online and apply for a credit card. The consumer can also view all the best credit cards, nationally, at bankrate.com. Bankrate.com is an invaluable tool for consumers.
Some other benefits: (1) It would halt the message being sent that credit is free and perhaps limit irresponsible accumulation of credit lines. (2) It would force the banks to become more competitive in their rates. The consumer is going to need a break and they will need it soon. And credit card rates, which are quite often above 22 percent, is piracy. (3) Eliminating mass mailings would save a lot of trees.
The debt bubble that’s deflating will just reinflate again down the line if we don’t actively restrain it.
This is the second email Nocera has printed from this guy, both of which have been great. Maybe the Times should give him his own column.
The New York Times's Public Editor is troubled about the practices at the paper's business section if reporters write columns. This is quite an interesting issue that extends to editorials at the BBC and CBC. I think that the Public Editor's ideas are anachronistic. Canada, for example, needs far more editorial depth than is being provided by the Asper media and The Globe and Mail. The Toronto Star has gone so gray and feeble in its editorial stances that it may as well not exist.
The CBC is limited by its atrocious Internet design, but it should examine Internet models such as at The Australian, CBS, and ABC, and publish full national editorials on all platforms without any of the traditional timidity of the BBC and such about tapping into the full power of public media editorials.
The BBC should be known for the best editorials in the world on international issues. An Al Qaeda freighter could show up tomorrow in Vancouver and we could get taken out by a dirty bomb. Melbourne could be overwhelmed by terrorists arriving on container ships with their lethal stocks. London and New York could be hit by synchronized NBC weapons any day now. And we are worried that if public media maximize their editorial potential, it might be "too powerful," in the words of one experienced journalist.
Editors, reporters, and the rigorously anachronistic members of journalism schools need to be poring over the best Internet news sites, reverse-engineering them, and advancing their techniques. The very last thing in the world we need to worry about is that some news reporter at The New York Times business section might write a strongly opinionated column.
Posted by Clayton Burns on Mon 1 Dec 2008 at 02:50 AM