Recently, the Consumer Financial Protection Bureau released a new model credit card agreement that vastly simplifies it for consumers. A key part of entering into a financial agreement, especially with something as important as a credit card, is making sure that both parties understand it. This new agreement accomplishes that goal.
Furthermore, the agreement shows what the CFPB can do if it is allowed to do its job. The Bureau was set up in the wake of the financial crisis of 2008, which was caused in part by industry-wide fraud in the home loan industry and by consumers not being able to understand their mortgage agreements. This led to uninformed or misinformed consumers taking out loans that they could not pay back.
The Bureau, with this currently non-mandatory model agreement, is trying to prevent similar fraud and deception in the credit card industry. Everyone should be able to get behind credit card agreements written in plain language. Unless your business is based on defrauding or deceiving customers, adhering to this model is not a heavy burden. It shouldnâÄôt be a political issue.
But Republicans in Congress have been fighting the CPFB tooth and nail. The person President Barack Obama originally wanted to appoint to head up the Bureau was Elizabeth Warren, a noted consumer advocate. But her nomination was scuttled by Republican opposition. The current nominee is also being blocked by Republicans.
Making financial agreements easier to understand for consumers is not a controversial issue. The Bureau will institute common-sense rules that will not be a burden on businesses unless they depend on fraud for profit. Enough politics; let the Bureau do its job.