« Payday Lending: The New “Laboratory of the States” | Main | Gheewalla - What's at Stake? »

Warning: This Card Stinks

posted by Elizabeth Warren

A friend of mine asked me a question.  In keeping with Angie's post on state laboratories, I thought I'd pass it along for collective wisdom:

  • I realize that states have little practical authority to regulate credit card practices because it is the regulatory rules of the bank's home state - not the consumer state - that apply.  But I was wondering whether the same is true of consumer warnings.  Could NY, for example, require that credit card solicitations in their state include warnings - for example, saying "This product includes rules that New York State believes are unfair to consumers"? 

I suspect this would be pre-empted, but I confess that I'm not entirely sure.  We know what happened when California required the credit card companies to disclose the amount of interest and length of time it would take to pay off credit cards if the customer made the minimum monthly payments.  The OCC claimed pre-emption and the 9th Circuit upheld them.  The OCC prevailed even though they had no regulation on point.  They claimed that no regulation was a regulation, and they won.

But this is a little different.  The language is merely warning--not regulating.  Could the states do it?

Why bother to pass "warning" legislation?  Some of the state legislators are getting pretty agitated about what they hear from their constituents about credit cards.  Some states want to act, and this is a way to remind the voters that the feds have tied their hands. 

June 12, 2007 at 7:02 PM in Credit & Debit Cards

Comments

Illinois used to have (and may still have) a law which required all credit card programs doing business in the State to register and provide the terms of each of their card programs. This was them published by, I believe, the AG's office and was publicly available in booklet form to consumers.

It would not be much of step from that to providing a rating based on various terms.

Posted by: Howard Strong | June 13, 2007 at 04:48 PM

I HAVE NO COMMENTS,BUT I JUST WANNA KNOW THE TYPES,SIMILARITIES,DIFFERENCES AND THE BENEFITS OF CONSUMERS ON THIS NEW CREDIT ACT NO.34 OF JUNE 2007

Posted by: mugzanani | September 11, 2007 at 03:36 AM

PLEASE SEND ME INFORMATION OF NEW CREDIT ACT no.34 JUNE 2007

Posted by: mugzanani | September 11, 2007 at 04:20 AM

The comments to this entry are closed.

Contributors

Current Guests

Follow Us On Twitter

Like Us on Facebook

  • Like Us on Facebook

    By "Liking" us on Facebook, you will receive excerpts of our posts in your Facebook news feed. (If you change your mind, you can undo it later.) Note that this is different than "Liking" our Facebook page, although a "Like" in either place will get you Credit Slips post on your Facebook news feed.

Categories

Archives

Bankr-L

  • As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. Although Bankr-L is a free service, membership is limited only to persons with a professional connection to the bankruptcy field (e.g., lawyer, accountant, academic, judge). To request a subscription on Bankr-L, click here to visit the page for the list and then click on the link for "Subscribe." After completing the information there, please also send an e-mail to Professor Lawless ([email protected]) with a short description of your professional connection to bankruptcy. A link to a URL with a professional bio or other identifying information would be great.

OTHER STUFF