Credit Reform Proposals: Hillary vs. Obama
Hillary Clinton and Barack Obama both have plans for reform…
Credit reform is one of the issues both Democratic hopefuls, Hillary Clinton and Barack Obama, have discussed during their bids to be the next president of the United States. Although their plans are similar philosophy, there are some key differences as well. Here’s a summary of both plans, how they work and what they’d like to accomplish:
Clinton’s Proposal
- Increase government regulation of credit cards through a new government
commission, the Financial Product Safety Commission. - Cap credit card interest rates at 30%.
- Require credit card issuers to clearly explain terms and fees to consumers.
- Prevent issuers from increasing rates without written consent from consumers.
- Prevent rate increases due to missed payment on unrelated accounts.
- Stop companies from charging interest on fees.
Obama’s Proposal
- Create a new consumer bill of rights to include extra protections.
- Prevent issuers from making unilateral changes to credit card terms.
- Require interest rate increases be applied only to future debt.
- Create a five-star rating system to give consumers a better sense of the rates
and fees associated with each card. Star ratings would be displayed with all
application materials. Learn more: Credit Card Saftey Star Act of 2007 > - Stop companies from charging interest on fees.
In recent months there has been increased scrutiny by Congress over unfair credit card practices such as excessive fees and unexpected interest rate adjustments. Just recently, the Credit Cardholders Bill of Rights Act of 2008 was introduced which addresses many of these issues. But additional reform will still be needed even if the legeslation passes, and both Democratic candidates seem to be on the right path. So far, the Republican front-runner John McCain hasn’t issued any credit reform proposals.
