- Democratic U.S. lawmakers said on Thursday they reintroduced credit card legislation aimed at curbing "unfair and deceptive" practices against consumers hit by unexpected rate increases and other fees.
- The action comes almost one month after the Federal Reserve approved final rules to prohibit a number of highly criticized practices starting next year but lawmakers said the Fed rules failed to go far enough sooner to rein in the industry.
- The Fed's rules take effect on July 1, 2010. They prohibit raising the annual percentage rate (APR) on existing balances except under certain circumstances, and give consumers 45 days notice before a rate increase and 21 days to pay. Among other changes, Fed rules will ban a practice known as universal default, in which card terms are changed based on how the holder performs on other bills, such as utilities or gym memberships. The Fed also approved a disclosure plan that was drafted after extensive focus group tests that even covered the size of type on credit card statements.
- Maloney, who chairs the House Financial Services Subcommittee on financial institutions and consumer credit, said she was unhappy with the July 2010 implementation date and wanted Congress to act sooner. She is seeking to have the rules go into effect 90 days after enacted instead of a full year as the bill previously stated.
...or the stocks could simply be a reflection on the weakening consumer in developed countries worldwide. Either way, the stocks are telling us bad things are happening.


This is yet another nail in the coffin of the U.S. consumer, and consumer disretionary stocks; not just in the short run but in the long(er) run as we embark on a structural shift in spending/habits and credit availability.
You can also see a complete lack of bounce in the 3 major "credit card" brands (who not only carry the legistlative risk but also the consumer default risk) This is an area we've been highlighting since '07 as a potential mine field. I'd love to get my hands on these on the short side on any bounce... but they are dead in the water. Please note - the last name is now under the protective shield of the government ("bank holding company")... and still sucking wind. Just as telling as stocks that are holding steady or up during corrections, are stocks that cannot make any headway upward during good periods. These are "Danger Will Robinson" stocks.


