austan goolsbee:i'm austan goolsbee of thecouncil of economic advisors. and i was just sitting herereading this reuters article. headline is "consumers tobenefit as credit card law debuts." and i was justremembering that the credit card law that goes into effect todaywas one of the very first
Credit Card Accountability Responsibility And Disclosure Act, consumer protections thatpresident obama got put in place. and he received thousandsof letters of people complaining about all sorts of practicesthat credit card companies were behaving in that theyreally shouldn't.
it was the wild west andthings were out of control. this bill that's going intoeffect today is going to change many things toprotect consumers. the first is it's going to puteverything aboveboard so that if you get a credit cardapplication, when you read it, there's going to be simple andclear disclosure of what the terms are. i have aph.d. in economics. i can barely readwhat these things are. much less you needreading glasses.
the smallest printyour printer can print. this is going to change thatso anybody can sit down and in plain language understand whatthe credit card bill says. the second thing is it's goingto prohibit a whole bunch of things that the creditcard companies did, the kind of evil genius thatsome of these companies engaged in, like setting yourdue date to be at 9 a.m. on the due date. so even if yougot the bill there on time, if the mail comes after lunch,you get a late fee because you
missed your payment deadline. things like that, they'rejust preying on people not understanding the legal parts ofthese contracts and it doesn't make any sense; or moving thedue date around at different days in the month, or sendingyou only seven days' notice to pay your bill. it's going toprohibit rate increases in various unfair circumstances. it's going to prohibit rateincreases based on what happened on some other bill havingnothing to do with this credit
card bill. so a number of thingsthat just make it clear, make it honest, protect the consumer,and lay it out for you so that you don't get tricked into doingthings or getting fees that you didn't know about. the creditcard industry had more than $15 billion of fees last year. it'sbecome a great business model for them. but in times likethis, america can't afford that. this is exactly the kind ofapproach that president obama takes across the board. whetherit's in the health plan, financial regulation, in a wholebunch of things that we got to
start looking out for ordinaryamericans, not just for whoever can afford to get alobbyist in washington.
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