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Foreclosed Home Auction Effects Pushed Credit Card Reform
May 21st, 2009 by 
Joseph Smith
What years of lobbying by consumer groups have not accomplished; the devastating effects of foreclosed home auction events have easily achieved.
The Senate on Tuesday overwhelmingly passed the credit card reform legislation that would control increases in interest rates and provide more protections for users of credit cards. The senators voted 90-5. A similar bill in the House has already been approved.
The credit card reform legislation would require the credit card industry to comply with a list of unprecedented requirements that include provision of advance notice for increases in interest rates, prevention of high charges for over credit limit expenses and the prevention of the practice called universal default, which allows lenders to raise rates when a credit cardholder is past due on another debt.
A similar bill was passed by the House earlier this May. The two versions will be combined and then sent to President Obama for signing. The bill rode to approval on a wave of anger over difficult times caused by foreclosed home auction events and perceived greed by large financial companies.
Banks, credit card issuers and other financial firms historically have been powerful in Washington, but during the debates on the credit card issue, senators condemned them for their exploitative practices. Surely, the economic effects of foreclosed home auction events have helped pushed the senators to support the bill.
Senator Christopher Dodd, who co-sponsored the reform bill, said that the practices of the credit card industry are abusive and they need to be stopped.
Democratic Senator Claire McCaskill also explained that thousands of emails have been received by her office in the past several months all complaining about abusive credit card practices.
McCaskill spoke before fellow senators last week and reiterated that the credit card legislation is the most important bill that affects consumers directly, especially during these times when hundreds of thousands of Americans have lost their houses to foreclosed home auction events.
Another Democratic legislator, Senator Tom Udall, also supported the bill by saying that credit card issuers that are fair to consumers have nothing to worry about.
In a public meeting last week in Albuquerque, President Obama again expressed his support for the bill, criticizing credit card ads that offer low rates but do not inform consumers that the rates can increase anytime.
According to White House reports, current overall credit card debt is $963 billion, an increase of 25 percent over total debt 10 years ago. The average household credit card debt in 2007 was $7,300.
Credit card debts are among the debt burdens of many homeowners who have lost their homes to foreclosed home auction events.
