Another Obama failure...

[dmyre]

They are not being discriminated against!

They must prove the ability to pay the money back. In other words, a J - O - B!

Where is the crime here? 18, 21, 32, 40 - age is not an issue here.

Can the loan be paid back? No? Then no CC.

Then why was the age of 21 mentioned?
Having the means to pay the money back applies to everyone, not just those under the age of 21.

[DomainsInc]

Come on Seraphim, we all know it was irresponsible teens that got us into this financial mess, Instead of blaming wall street and the mortgage crisis, what we really should be doing is punishing teens for what they did, Maybe Obama can re-institute the draft, or better yet, being the free thinker that he is, he could force all teens ages 18-21 to work for upstanding organizations like Acorn, creating voter registration cards under imaginary names, and teaching prostitutes how to operate legitimately.

I really doubt this has anything to do with the current financial problems. There are groups that have been fighting for this for over a decade. Mostly parents of young people who have killed themselves due to getting way over their heads in debt.

[Raider]

I don't know of any credit card issuers that would give credit and not verify employment from someone who has NO credit history at all, I'm sure it can happen, but if it did, the credit limit would be very low, and they would have to establish a payment history before increasing the credit limit, That's kind of hard to do when the credit card holder doesn't have a job.

[Gerry]

This is discrimination???

Card for young adults. The Senate bill eliminates credit cards for people under the age of 21 unless an adult co-signs or they can show proof of income.

It is an AND/OR scenario.

There is not a thing discriminatory about this. Nothing.

It protects the young consumer from ruining their credit and protects parents who ultimately would end up bailing them out in the long run.

The ones that lose are the credit card companies who prey on these kids.

Here, read this.

It is okay to issue a credit card to someone under 21 IF they have the ability to pay OR their parents co-sign the loan.

That's discriminatory???

Does that sound better?

[Raider]

I really doubt this has anything to do with the current financial problems.

Thank you, I dont think so either.

IThere are groups that have been fighting for this for over a decade. Mostly parents of young people who have killed themselves due to getting way over their heads in debt.

That's a fair argument, But I think there are better ways to prevent teens from going deep in debt, Like placing limits on how much credit teens 18-21can have, This can be done just by a creditor pulling up your credit report.

[think]

I don't know of any credit card issuers that would give credit and not verify employment from someone who has NO credit history at all, I'm sure it can happen, but if it did, the credit limit would be very low, and they would have to establish a payment history before increasing the credit limit, That's kind of hard to do when the credit card holder doesn't have a job.

You might have missed the news articles like this from a few years back:

Majoring in credit-card debt
Aggressive on-campus marketing by lenders is coming under fire.....

....

But the experiences of Woodworth and other students raise questions about the rigorousness of the vetting process for getting a credit card. Ryan Rhoades, who graduated from the University of Pittsburgh last year with more than $13,000 of debt, remembers his credit-card company's employees telling him not to worry about being unemployed. Lukasz Kozoil, formerly a student at DePaul University, says that Citibank's representatives told him to fill in his tuition on a card application where it asked for income. (A spokesman for Citibank says, "no representative from Citi is authorized to fill in tuition cost on a credit-card application.") Woodworth got his American Express card without a job, and it had a credit limit of $6,000. "Within three months, they upped it to $10,000," he says.

This is not common practice for the credit-card industry. In most cases, an unemployed person would have a hard time getting a credit card, especially one with a five-figure credit line. Consumer advocates say that banks have modified their practices for college students, because they're vulnerable and their parents will usually bail them out. "When you compare this to the way that credit is extended in the general population, there seems to be something wrong with this system," says Linda Sherry, director of national priorities at Consumer Action, a San Francisco consumer education and advocacy group.

http://www.msnbc.msn.com/id/20607411...sinessweekcom/

[jberryhill]

This bill prohibits responsible adults from establishing credit at a time when they need to.

Reading problem much?

Under the new law, no one under age 21 can get a credit card unless a parent, guardian or spouse is willing to co-sign or unless the young adult has proof of sufficient income to cover the credit obligations

...OR UNLESS THE YOUNG ADULT HAS PROOF OF SUFFICIENT INCOME TO COVER THE CREDIT OBLIGATIONS.

This measure is a response to a demonstrated problem of deceptive advertising directed primarily at persons enrolling in college. The scam works by credit card companies setting up freebie booths when the kids are moving in, and signing them up for credit cards with limits well over their ability to pay. They do this intentionally, because they know that the parents will bail out their kids when the kids over-extend.

What's amusing here is that Raider is of the persuasion that the financial crisis was due to relaxed lending standards applied to low income home buyers, but she is opposed to measures designed to enforce responsible lending practices.

Which Raider will it be tomorrow? The Raider who condemns predatory lending, or the Raider who doesn't want lending practices tied to demonstrated ability to pay?

Tune in tomorrow as Raider engages herself in a panel debate on lending regulation. Popcorn will be served.

That's a fair argument, But I think there are better ways to prevent teens from going deep in debt, Like placing limits on how much credit teens 18-21can have, This can be done just by a creditor pulling up your credit report.

Nonsense. Macauley Caulkin at age 16 was perfectly entitled to a six figure credit line. The point is to require that income match up with credit. The card companies don't pull the 18-21 year old's credit report - because as you have amply explained THEY DON'T HAVE A CREDIT HISTORY.

What the card companies do instead is to sell this stuff on campus, where it is a given assumption that the parents have some money.

Why limit the amount of credit that can be extended to an 18-21 year old who has a perfectly fine income to support a line of credit? That's just silly.

But let's be clear on Raider's rules of credit regulation:

- extending credit to low income families for mortgages beyond their income - bad

- extending credit to young adults without demonstrated income - good

Okay. Got it.

I don't know of any credit card issuers that would give credit and not verify employment from someone who has NO credit history at all

Then you are thoroughly ignorant of the situation this legislation is intended to address.

Credit card companies INTENTIONALLY extend lines of credit to college students with no income and no credit history, because they know the parents will bail them out. It is a practice that has been going on for years, to the frequent shock of parents who find out that their kid rang up a huge debt and will be financially crippled in the future unless the parents bail the kid out.

The fact that you are apparently ignorant of this widespread problem does not change the fact that the problem is a severe and frequent one, which is profitable for the credit card companies, even with the percentage that simply default, because enough parents pay back the high interest and penalty fees to make it worthwhile.

It is a pure scam, and there is nothing wrong with requiring demonstrated income to extend credit.

But you've already contradicted yourself here, since you started out by saying that "young people need to establish credit" and now you are pleading ignorance about credit card companies extending credit to people without credit histories. Yes, the credit card companies do just that, and they target the practice to young people who the companies determine have parents with money.

[fab]

or unless the young adult has proof of sufficient income to cover the credit obligations

I always thought everyone had to do that.

[JuniperPark]

Another bad idea from our lame thinking President.

What about responsible individuals who want to leave home and start a life of their own and don't have parents willing to co-sign? What about them? Where do they go? Would they be forced to stay at home until they establish their own credit history?

Think about it, Many teens leave their parents once they turn 18, This bill would prevent them from establishing credit, getting a car, an apartment, even renting a motel room, How is this GOOD?

Just because many teens are irresponsible, doesn't mean that all of them are.

I hope this doesn't apply to Debit/Visa or Debit/Mastercard

This is about as silly as saying "nobody can live without a cellphone".

Anyone over age 35 can tell you we DID get by without instant, unearned, easy credit... just as we "survived" without cell phones.

[fab]

Anyone over age 35 can tell you we DID get by without instant, unearned, easy credit... just as we "survived" without cell phones.

Credit cards have been around for a long time now. BTW, I am over 35, and I got a credit card quite easily many years ago.

[JuniperPark]

Credit cards have been around for a long time now. BTW, I am over 35, and I got a credit card quite easily many years ago.

Not without a verifiable income, established bank account, and means to repay (or good co-signers) you didn't.

[fab]

Not without a verifiable income, established bank account, and means to repay (or good co-signers) you didn't.

Not without a verifiable incomeActually I didn't, but in any case, these questions are always asked now as well.

[JuniperPark]

Not without a verifiable incomeActually I didn't, but in any case, these questions are always asked now as well.

No, they aren't.

That's why so many 20-somethings are in deep, deep debt before they even start their 1st job.

[fab]

No, they aren't.

Well, that's news to me. I have applied scores of times, and have always had to answer those questions.

[Gerry]

Well, that's news to me. I have applied scores of times, and have always had to answer those questions.

Go to a big school's football or basketball game...you will see good looking girls manning kiosks surrounded by drunk students who are being given free collegiate tshirts in exchange for filling out a credit card application - that is how it is presented.

Fact is, the credit card companies know this. They know that their future market and future income makers are at these events. They market directly to these students at these events. They target this market. Eons ago I dated a girl who went to rival East Carolina University, one of the top partying schools at the time. During greek week, the quad was crowded with Beer tents from all the major beer makers, fun games and music, and the credit card companies.

Every one knows what goes on during these events. No one cares that there are also laws to limit the drinking age. People know if someone intends on drinking and getting drunk they will find a way to get the beer/liquor and drink it.

The question would be, how many of those applications filled out are actually turned down? My guess would be a very, very, small percentage of them. That is why they send out a credit card with an acceptance letter of approval. And those credit card companies are going to get their money because you listed your nearest relative not living with you - your mommy.

Five months later, your mommy is getting a phone call from the CC rep stating that Sissy has not made a payment and listed mommy as a relative. Then comes the pressure of how your darling little daughter/son is in jeopardy of ruining their credit FOREVER and may cause them to not get their grant, car, student loan or EVEN A JOB because all future employers look into financial responsibility before hiring a prospect and want to know if they have ever had wages garnished. Mommy then calls sissy to talk about how irresponsible they have been, Sissy cries, and daddy will pay the bill this one time.

Sound familiar?

It should. This is perhaps a page right out of the Credit Card's training manual.

[Mike Cruz]

I have worked with many young people for debt consolidation, credit repairs, etc. but I have to say that I have definitely dealt with more divorced individuals than anything else.

But I have to say, I think this is very good, as like doc has stated, you go to any concert, sporting event, etc. Credit card companies are targeting young individuals and even more today... Why? Because they know they can get a younger person who has yet to establish credit or debt... yet... then the older individuals / couples who have taken a huge loss in income/jobs who have nothing but debt. Let's face it, there are a lot of responsible 18 year olds, but there are tons of irresponsible 18,19,20,21 year olds as well.

I really don't understand why people are getting upset about this bill. The president is trying to protect the young people from making mistakes and its a issue? You do know that young people grow up and dominate are overall economy, right? They are the ones that will be buying houses, cars, clothing, food, etc. if it takes them a couple extra years to make sure that they can financially and mentally afford responsibility, sobeit...

[katherine]

Seriously credit is too lax in the US. Issuers are eager to push debt onto consumers. I actually think one of the reasons identity theft in so prevalent the US is because the issuers are just too lax and don't do enough screening.

I would say the average American has 4 credit cards and 1 debit card in their wallet - in Europe it's the opposite Americans have been living on credit and above their means.
In America there is more emphasis on personal responsibility, so it's very easy to run deep into debt. On the other hand that kind of laissez-faire attitude ultimately led to the subprime crisis and chaos.
Looks like just another law restating the obvious.

People ain't reading the bill... well I guess Congress will vote but they won't read it either

[Mike Cruz]

Seriously credit is too lax in the US. Issuers are eager to push debt onto consumers. I actually think one of the reasons identity theft in so prevalent the US is because the issuers are just too lax and don't do enough screening.

I would say the average American has 4 credit cards and 1 debit card in their wallet - in Europe it's the opposite Americans have been living on credit and above their means.
In America there is more emphasis on personal responsibility, so it's very easy to run deep into debt. On the other hand that kind of laissez-faire attitude ultimately led to the subprime crisis and chaos.
Looks like just another law restating the obvious.

I concur, but I have only 1 credit card and 5 debit/check cards... I am anal though and will only spend money I KNOW I have available to spend.

[jberryhill]

I always thought everyone had to do that.

The credit card companies can issue on any terms they want.

Doc Com is right about the way these things are sold to college students without proof of anything other than a student ID.

Yes, if YOU, a 35 year old want a credit card, then you have to go through whatever checks and safeguards the company imposes. But they hand these things out to college students like candy.

I don't blame you for being surprised, because it is something of a shocking practice, and your first thought is "Why do they extend credit without proof of anything?"

The reason is simple. If you go to the campus of, say, UPenn, you know darn well that a good portion of those kids have families with money. So you want to get a credit card into those kids' hands, let them dig a hole, and then Mom & Dad will bail them out.

And, yes, they get "booth babes" and hand out swag for signing up. The application is a very simple form.

The credit card companies actually pay colleges to set up these booths at student events and during move-in week:

http://www.betterbudgeting.com/artic...legecampus.htm

The morning chill in the air and earlier sunsets mean that fall is quickly approaching. For most people, fall means changing leaves, the kids going back to school and football games. For college students, it means booths cropping up all over campus that are giving away free t-shirts or hats just for filling out a quick application.

Try googling variations on these words: college student credit cards

The applications given to college students are unlike anything that anyone else is given. Raider is opposed to changing that, and believes that credit card companies should continue these practices.

Five months later, your mommy is getting a phone call from the CC rep stating that Sissy has not made a payment and listed mommy as a relative. Then comes the pressure of how your darling little daughter/son is in jeopardy of ruining their credit FOREVER and may cause them to not get their grant, car, student loan or EVEN A JOB because all future employers look into financial responsibility before hiring a prospect and want to know if they have ever had wages garnished. Mommy then calls sissy to talk about how irresponsible they have been, Sissy cries, and daddy will pay the bill this one time

Actually, some of them go farther than that. They imply that the parent is required to pick up the tab, and some of the parents believe it.

I really don't understand why people are getting upset about this bill.

Really?

It's beyond obvious why Raider is opposed to it, even though she knows nothing about it, and even wonders if it applies to debit cards, as if this had anything to do with debit cards.

Please remember, these are legal adults, being discriminated against for their age.

Had a drink in a bar with an 18 year old lately?

The law requires lenders to verify income, and has nothing to do with discriminating against anyone. The lenders already do this on non-college student applications. The point is about uniform standards, and not discriminatory ones.

Fail.

By the way... the votes on this bill were:

House: 357 Ayes, 70 Nays, 7 Present/Not Voting.

Senate: 90 Ayes, 5 Nays, 4 Present/Not Voting

The following Senate Republicans voted Aye:

Yea WY Barrasso, John [R]
Yea MO Bond, Christopher [R]
Yea KS Brownback, Samuel [R]
Yea KY Bunning, Jim [R]
Yea NC Burr, Richard [R]
Yea GA Chambliss, Saxby [R]
Yea OK Coburn, Thomas [R]
Yea MS Cochran, Thad [R]
Yea ME Collins, Susan [R]
Yea TN Corker, Bob [R]
Yea TX Cornyn, John [R]
Yea ID Crapo, Michael [R]
Yea SC DeMint, Jim [R]
Yea WY Enzi, Michael [R]
Yea SC Graham, Lindsey [R]
Yea IA Grassley, Charles [R]
Yea NH Gregg, Judd [R]
Yea UT Hatch, Orrin [R]
Yea TX Hutchison, Kay [R]
Yea OK Inhofe, James [R]
Yea GA Isakson, John [R]
Yea NE Johanns, Mike [R]
Yea IN Lugar, Richard [R]
Yea FL Martinez, Mel [R]
Yea AZ McCain, John [R]
Yea KY McConnell, Mitch [R]
Yea AK Murkowski, Lisa [R]
Yea ID Risch, James [R]
Yea KS Roberts, Pat [R]
Yea AL Sessions, Jefferson [R]
Yea AL Shelby, Richard [R]
Yea ME Snowe, Olympia [R]
Yea LA Vitter, David [R]
Yea OH Voinovich, George [R]
Yea MS Wicker, Roger [R]

The bottom line remains; This bill prohibits responsible adults from establishing credit at a time when they need to.

Bullshit. "Responsible adults" do not obtain credit lines which cannot be supported by demonstrated income, and responsible lenders do not issue such credit lines. There is a huge consumer credit bubble which is as dangerous as the bad mortgages that blew up last year.

But it is interesting to see that you now disagree with an overwhelming majority of Republicans in both the House and Senate on this one.

And for completeness, the entirety of the nays were:

Nay SD Johnson, Tim [D]
Nay SD Thune, John [R]
Nay TN Alexander, Lamar [R]
Nay UT Bennett, Robert [R]

Notice that South Dakota has a D and and R in the Senate and they both voted Nay.

Do you know why? Is it because they care about "responsible young adults"?

No. South Dakota is home to the largest credit card payment processing application centers.

http://resources.lawinfo.com/en/Arti...edit-card.html

Do you ever wonder why your Citibank credit card bill comes from South Dakota, and your payment goes there as well, when you know that Citibank is headquartered in New York? It is because of a combination of federal law and 50 different state laws that allow a bank in New York to use a South Dakota address to bill a customer in California.

What's even funnier about your position, Raider, is that you spent weeks crying about Gramm-Leach-Bliley, which was passed by a veto-proof majority under Clinton, and obviously since Bush was powerless for eight years after that, the credit crisis was Clinton's fault. I'm sure you remember that.

This legislation patches one of the holes MADE by the very legislation in 1999 that you have been upset about.

So, you really weren't against Gramm-Leach-Bliley after all? Or you are just opposed to fixing some of the problems it created?

Make up your mind, Raider.

oops, missed a Nay:

Arizona
Yea AZ McCain, John [R]
Nay AZ Kyl, Jon [R]

Please note that McCain voted FOR this bill. If he had been elected president, he would have signed it as well.

But it is an "Obama fail" despite being passed by remarkably large and veto-proof majorities, which included a majority of all Republicans in Congress.

(on edit: Gee, Raider, why do your posts disappear after I respond?)