Although there hasn’t been nearly enough time for the effects of the Credit Card Accountability Responsibility and Disclosure Act — passed into law by the Congress of the United States of America in the late spring of 2009 (and implemented at the beginning of last year) — to be properly assessed, commentators and pundits have nevertheless judged the legislation a qualified success. However, as an unexpected consequence of the strengthened restrictions guiding interest rates and penalties levied upon unsecured lines of credit, borrowers have found their credit card debt account balances suddenly reduced without warning. While we may all encourage the macro-economic rewards of restrained credit card debt usage by any means necessary, the constrained credit availability will inevitably seem far less desirable to consumers when their own financial opportunities are put in question.
Furthermore, consumers — beyond, of course, the men and women below the age of twenty-one who have been uniformly denied access to credit card debt without the participation of a legal adult — hoping to obtain new accounts have seen the qualifications for approval heightened across the board. In response to the sanctions, the largest creditors have already begun to revise their lending policies to profitably issue new forms of credit card debt to applicants possessing a lower level of eligibility than the corporate underwriters deem absolutely safe (standards likely to be loosened once a sufficient amount of time has passed to evaluate the new risk pool). The banks, for their part, have been actively promoting their retraction of resources as a pre-emptive form of debt relief, spinning the contextual parameters to suggest the industry’s interests lie in helping customers avoid bankruptcy above all else.
“Sure, now, they’re trying to curb household debts,” said Steve Trenton, vice president of consumer advocacy organization American Debt Relief. “Now that the federal government’s gotten itself involved and the account holders can see just how much of a joke minimum payments really are. All they’re doing, really, is just deflecting the frustrations and genuine rage that heads of the household around the country have been feeling for a long time. We’d all grown so accustomed to carrying these debt burdens on our backs, thinking it was normal to live this way, and, all of a sudden, the blinders have been ripped away. It’s time the corporations behind credit card debt are held responsible for their actions, and, for the millions of people that have already fallen victim, the political establishment has to prop up the credit card debt relief effort.”
To that point, seasoned veterans of governmental affairs believe our elected officials have been substantially less effective in terms of enabling the debt relief ventures of ordinary Americans. The legislation, currently under discussion on the floor of the House of Representatives, intended to streamline the debt settlement negotiation process and prevent fraudulent enterprises from taking advantage of impoverished families might seem like a can’t miss prospect, but, keep in mind, the weight of the lending community’s more than ample resources has steadily pushed the need for reform (never a good idea when debt relief’s the issue at hand). As Trenton suggests, the Credit CARD Act has indeed provided a much-needed step forward, but, with such tenuous markets and shaky economic indicators, we need our leaders to pay more than the minimum amount of attention to what’s becoming a genuine credit card debt crisis.
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