[SpaceMonkey]

Originally Posted by Snow-i 

You still haven't shown how this regulation will help in the least bit. You might delay some bad debt for a few years...but the problem will remain and the only thing we have at the end of the day is another regulation, and 21 year olds with higher amounts bad credit because they never learned their lesson in college. Show me how this will help anything. Explain to me how we're bettering the economy by denying a personal freedom to these 18-21 year olds...the answers you've given thus far are short sighted and flawed.

You seem to be not actually reading my posts, as I've explained this many times (are you related to stupendousman?). There is a moral hazard in extending credit to people with no income on an assumption, that is not backed up legally, that others will pay. Further, you seem to not be familiar with the actual regulation that we're discussing. No one is talking about denying "personal freedom" to 18-21 year olds. What we're talking about is for them, in order to get a credit card, to 1) have a job, or 2) have a co-signer that can back them up if they can't pay. You know, the same rules that apply to the rest of the non-college student population. It's not an unreasonable burden.

[jokell82]

Originally Posted by SpaceMonkey 

If the card issuer is evaluating the applicant as a dependent then there needs to be some responsibility on their part to make sure that that they have legal recourse to go after the parents if the cardholder can't pay the minimum.

I agree, which is why they should require a parent to cosign for the card. But where does the federal government fit in to this equation?

It seems to me that if they aren't doing this already then they should be losing money.

[SpaceMonkey]

Originally Posted by jokell82 

I agree, which is why they should require a parent to cosign for the card. But where does the federal government fit in to this equation?

It seems to me that if they aren't doing this already then they should be losing money.

They don't lose money because they make up in transaction fees and other revenue for what they are not collecting in payments. They would rather not require a parental co-sign because it would dissuade some new customers from signing up. The federal government's role here is partly paternalistic, I agree, but there is a legitimate economic interest in making sure that the credit card industry as a whole is not making a wild bet on an entire generation.

[besson3c]

This thread looks exactly like pretty much every other thread in here...

Somebody tries to make a one-sided point, the other person does not acknowledge the legitimacy to the argument and instead tries to invalidate it, the other person defends the point, etc.

So many points have two sides to them, and the best solutions involve a healthy balance. When are we going to realize this and try to find a healthy balance rather than just spend an exhaustive effort trying to convince people that the issue is really one-sided only to fail and really go nowhere?

That debt is bad for the economy is a legitimate point, that it would be great if government did not have to regulate who can have credit is another. That regulations when applied appropriately is another valid point, as well as the fact that it is possible to overdo them.

The sooner we all can acknowledge this, the sooner we can try to find realistic and practical solutions.

[CRASH HARDDRIVE]

I see the forum mommy is back.

[Snow-i]

Originally Posted by SpaceMonkey 

You seem to be not actually reading my posts, as I've explained this many times (are you related to stupendousman?). There is a moral hazard in extending credit to people with no income on an assumption, that is not backed up legally, that others will pay.

You seem to be misunderstanding my responses. You've provided no support for how the measure that is in the works is going to do the least bit to mitigate the "problem" that you have also poorly supported. So you haven't even established that this segment of the market is a problem, and further, haven't provided a reason why this "fix" is going to work if indeed there is a problem in this market.

So far, you've made up a problem to fit a solution that fixes nothing.

I also won't respond to petty parenthetical quips. Leave your attitude for the playground; I am only interested in discussing the issue at hand.

Further, you seem to not be familiar with the actual regulation that we're discussing. No one is talking about denying "personal freedom" to 18-21 year olds. What we're talking about is for them, in order to get a credit card, to 1) have a job, or 2) have a co-signer that can back them up if they can't pay. You know, the same rules that apply to the rest of the non-college student population. It's not an unreasonable burden.

But a burden nonetheless that serves no purpose but to further a political agenda. Specifics be damned...right?

[Snow-i]

Originally Posted by jokell82 

I agree, which is why they should require a parent to cosign for the card. But where does the federal government fit in to this equation?

It seems to me that if they aren't doing this already then they should be losing money.

Said better than i could.

[besson3c]

Originally Posted by CRASH HARDDRIVE 

I see the forum mommy is back.

The attack is unnecessary. We all have our agendas here. Some is pointing out flaws of the right, others are pointing out flaws of the left, mine is the make this place less of an idiot circus cesspool of time wasting stupidity. We've had many great conversations in here that weren't this way, I just want all of them to be this way.

[turtle777]

Originally Posted by besson3c 

The sooner we all can acknowledge this, the sooner we can try to find realistic and practical solutions.

What the heck are you talking about ?

The practical solution is for the government to get their f***ing sticky fingers out of people's business.

Unless you need a nanny. Obama & Co might serve you well then...

-t

[besson3c]

Originally Posted by turtle777 

What the heck are you talking about ?

The practical solution is for the government to get their f***ing sticky fingers out of people's business.

Unless you need a nanny. Obama & Co might serve you well then...

-t

Do you mean in general, or with this particular issue? You'll notice that I was making a general statement.

[turtle777]

Originally Posted by besson3c 

Do you mean in general, or with this particular issue? You'll notice that I was making a general statement.

Let's just say in this particular issue, so you don't weasel out by saying my comment was too general, that you needed more facts etc...

-t

[besson3c]

Since I wasn't talking about this issue, you can expect a lot of weaseling. I don't have an opinion yet.

[jokell82]

Originally Posted by SpaceMonkey 

They don't lose money because they make up in transaction fees and other revenue for what they are not collecting in payments. They would rather not require a parental co-sign because it would dissuade some new customers from signing up. The federal government's role here is partly paternalistic, I agree, but there is a legitimate economic interest in making sure that the credit card industry as a whole is not making a wild bet on an entire generation.

Your logic isn't making sense here. They're not losing money because they're getting paid? Then where exactly is the problem?

[ctt1wbw]

3 pages? Holy ****! I don't even feel like reading it anymore.

[ghporter]

Originally Posted by jokell82 

If they can't pay the companies already have plenty of incentive not to give them credit - losing money.

And yet these companies have been extending credit to this particular demographic as if they were rolling in dough. It appears that the point of this is to pressure parents into bailing out their kids. Either way, it's unethical.

Originally Posted by Snow-i 

The point is its not up to you. Its up to the "kids" who are by definition legal adults. You, and the government, should not be telling them what they can and can't do. If they want to make bad choices, then they should be allowed to. Its not your job or your right as the government to deny them that.

If the credit cards are preying on college kids, use some of my tax money to help educate them. Regulating them will do nothing to curb this issue. They'll just wait til their 21 and they'll do it then instead - they won't know any better. The stakes will be higher at that point also.

Educate, don't regulate.

There are a number of rules about extending credit that already exist. They have not kept predatory lenders from taking advantage of people. Educate people about "payday loan" companies? So far that has only worked spottily, while states have legislated ways to make their usurious business practices so onerous to these companies that screwing people over just isn't fun anymore. But this sort of corporate loan sharking still goes on in states that haven't made such laws, and people are being bled dry because of it.

We have a number of established rules against taking unfair advantage of seniors, taking advantage of the poor, taking advantage of...etc. I think a basic rule that says "newly adult people should not be victimized for their lack of experience" is not that much of a burden. Especially since a number of major lenders were shelling out a good fraction of a million dollars to people who really shouldn't have qualified for ANY mortgage to begin with, a little "common sense" regulation sounds like a good way to keep our current banking and investments meltdown from happening again-at least not the same way.

You can already get a prepaid or "sponsored" credit card in your name but with an established means to pay (usually parents), and these seem to be a good choice. And they are up front about who will pay, too, unlike the "hey kids, just cash this check and we'll send you a credit card (with a huge interest rate and almost no grace period) so you can buy whatever you want whenever you want!!!" offers new college students get as soon as they step on campus.

[jokell82]

Originally Posted by ghporter 

And yet these companies have been extending credit to this particular demographic as if they were rolling in dough. It appears that the point of this is to pressure parents into bailing out their kids. Either way, it's unethical.

I still fail to see the problem. There are three possible outcomes to this scenario:
1. Customer pays his credit card off, everyone is happy.
2. Customer doesn't pay, credit card company loses money.
3. Customer doesn't pay, parents do, credit card makes money and the customer ends up in a world of **** from his parents.

And beyond that, the parents are not legally liable for anything, so if they decide not to bail out the kid it goes back to option 2 and the credit card company loses money. So where is the problem again?

Also, lets remember that these are not children - they are fully legal adults. Why do they need protection from themselves?

[ghporter]

Originally Posted by jokell82 

I still fail to see the problem. There are three possible outcomes to this scenario:
1. Customer pays his credit card off, everyone is happy.
2. Customer doesn't pay, credit card company loses money.
3. Customer doesn't pay, parents do, credit card makes money and the customer ends up in a world of **** from his parents.

And beyond that, the parents are not legally liable for anything, so if they decide not to bail out the kid it goes back to option 2 and the credit card company loses money. So where is the problem again?

Also, lets remember that these are not children - they are fully legal adults. Why do they need protection from themselves?

You're obviously not a parent. The credit card companies are applying a subtle amount of blackmail by extending credit to kids who can't pay, because they EXPECT the parents to bail the kids out. A parent usually wants to protect their child whenever possible, and from what I've gathered on campuses, this is what happens: kid gets card, kid racks up some serious debt, kid gets bill and freaks out, kid screams "mom and dad what'll I dooooo???", parents pay off the card. The "problem" here is that the kid usually doesn't freak until several bills go past due (not having any education in how to use credit, they don't get the whole "pay by due date" thing in the first place), so now not only have the parents paid for the debt, but the kid is saddled with a label of "bad credit risk." That label means the credit card companies can feel good about applying their highest rates when the kid graduates and gets a job.

So unless you don't see anything wrong with blackmail and a cute little setup that puts the credit card companies in the position to charge young professionals out the wazoo AFTER ripping off their parents, then I don't think I'll be able to demonstrate "the problem."

[SpaceMonkey]

Originally Posted by jokell82 

Your logic isn't making sense here. They're not losing money because they're getting paid? Then where exactly is the problem?

Because what's good for them in this case is not good for the larger economy. This is the same rationale for a lot of other government regulations of financial institutions.

[SpaceMonkey]

Originally Posted by Snow-i 

You seem to be misunderstanding my responses. You've provided no support for how the measure that is in the works is going to do the least bit to mitigate the "problem" that you have also poorly supported. So you haven't even established that this segment of the market is a problem, and further, haven't provided a reason why this "fix" is going to work if indeed there is a problem in this market.

So far, you've made up a problem to fit a solution that fixes nothing.

I also won't respond to petty parenthetical quips. Leave your attitude for the playground; I am only interested in discussing the issue at hand.

But a burden nonetheless that serves no purpose but to further a political agenda. Specifics be damned...right?

If you don't understand the fundamental economic problem of a moral hazard (in addition to the other issues that Glenn is raising), then I can't help you. As far as I can tell, you are more interested in sharing your histrionics about "personal freedom" than anything else.

[jokell82]

Originally Posted by ghporter 

You're obviously not a parent. The credit card companies are applying a subtle amount of blackmail by extending credit to kids who can't pay, because they EXPECT the parents to bail the kids out. A parent usually wants to protect their child whenever possible, and from what I've gathered on campuses, this is what happens: kid gets card, kid racks up some serious debt, kid gets bill and freaks out, kid screams "mom and dad what'll I dooooo???", parents pay off the card. The "problem" here is that the kid usually doesn't freak until several bills go past due (not having any education in how to use credit, they don't get the whole "pay by due date" thing in the first place), so now not only have the parents paid for the debt, but the kid is saddled with a label of "bad credit risk." That label means the credit card companies can feel good about applying their highest rates when the kid graduates and gets a job.

So unless you don't see anything wrong with blackmail and a cute little setup that puts the credit card companies in the position to charge young professionals out the wazoo AFTER ripping off their parents, then I don't think I'll be able to demonstrate "the problem."

What kid? Do you mean the adult that is fully capable of entering into legally binding contracts?

Sorry, I have no sympathy for these people. You can call it unethical or shady all you want, but the fact is that all of the data is there and available for these people when they sign up. It's not blackmail if the terms are written on a piece of paper that you sign.

I was able to walk right past those tables when I was in college, why do people with less common sense need government protection?

Edit - You also mention that the "kids" don't have an education on how to use credit. That would be the parents fault for not teaching them before they're released into the wild. Again, not a problem the federal government needs to get involved with.

[SpaceMonkey]

Originally Posted by jokell82 

What kid? Do you mean the adult that is fully capable of entering into legally binding contracts?

Sorry, I have no sympathy for these people. You can call it unethical or shady all you want, but the fact is that all of the data is there and available for these people when they sign up. It's not blackmail if the terms are written on a piece of paper that you sign.

Except what's not there in the terms, in this case, is that the line of credit being extended is based on the parent's responsibility over the son/daughter as a dependent. You keep coming back to the point that these individuals are adults capable of entering into legally binding contracts, but the specific situation we are talking about here relates to people who are dependents. They should not be able to enter into a line of credit based on their dependent status without formal assent from their parent/guardian.

[jokell82]

Originally Posted by SpaceMonkey 

Except what's not there in the terms, in this case, is that the line of credit being extended is based on the parent's responsibility over the son/daughter as a dependent. You keep coming back to the point that these individuals are adults capable of entering into legally binding contracts, but the specific situation we are talking about here relates to people who are dependents. They should not be able to enter into a line of credit based on their dependent status without formal assent from their parent/guardian.

So there is a credit check run on the parents? Or is it an assumption on their part that is not legally binding?

Here's the deal - if the parents don't pay the companies lose money. If the parents do pay all is well. So is the problem that the parents feel obligated to pay for something they are not legally liable for? Easy solution - either educate your kids before they go off into the world or deal with the possible consequences. Still see no need for the government to come anywhere near this.

[SpaceMonkey]

Originally Posted by jokell82 

So there is a credit check run on the parents? Or is it an assumption on their part that is not legally binding?

Here's the deal - if the parents don't pay the companies lose money. If the parents do pay all is well. So is the problem that the parents feel obligated to pay for something they are not legally liable for? Easy solution - either educate your kids before they go off into the world or deal with the possible consequences. Still see no need for the government to come anywhere near this.

Again, what's good for the credit card companies in this case is not good for the larger economy. Of course the companies don't want the parents to be liable -- then the parents are more likely to pay closer attention what their son or daughter is putting on the card. But the government does have a legitimate interest in not seeing consumer debt skyrocket across an entire generation. Ideally, it would be great if the government didn't have to get involved, but I don't think you'd take kindly to the government forcing parents to educate their kids on the issue, either.

I still fail to see the problem. There are three possible outcomes to this scenario:
1. Customer pays his credit card off, everyone is happy.
2. Customer doesn't pay, credit card company loses money.
3. Customer doesn't pay, parents do, credit card makes money and the customer ends up in a world of **** from his parents.

Just to follow up on this, also. I think I've poorly explained it previously, but in outcome (2) the credit card company is still happy, which exacerbates the moral hazard. What they are after in this age bracket is market share for a fee-based commodity.

[turtle777]

Originally Posted by jokell82 

Here's the deal - if the parents don't pay the companies lose money. If the parents do pay all is well. So is the problem that the parents feel obligated to pay for something they are not legally liable for? Easy solution - either educate your kids before they go off into the world or deal with the possible consequences. Still see no need for the government to come anywhere near this.

Or, educate the parents.

It's really interesting to see how "diverse" the thinking of the parents is.

One the one hand, they seem to feel they are liable for their kid's debt, on the other hand, as a whole, they feel no moral obligation to take care of their own debt (CC, mortgage, HELOC, etc...). Weird world.

-t

[Snow-i]

Originally Posted by SpaceMonkey 

If you don't understand the fundamental economic problem of a moral hazard (in addition to the other issues that Glenn is raising), then I can't help you. As far as I can tell, you are more interested in sharing your histrionics about "personal freedom" than anything else.

There is no fundamental economic problem presented here. You have not been able to to say anything other than "debt is bad" as though that it is sufficient. Show me how this demographic is affecting the economy. You can't, because its not. Its a moral crusade for the government to play parent...nothing more.

The moral hazard here is not being caused by the credit card companies or the students using the cards.

[ort888]

Originally Posted by ctt1wbw 

3 pages? Holy ****! I don't even feel like reading it anymore.

Not reading things seems to be your specialty.

[OreoCookie]

Originally Posted by turtle777 

Or, educate the parents.

It's really interesting to see how "diverse" the thinking of the parents is.

One the one hand, they seem to feel they are liable for their kid's debt, on the other hand, as a whole, they feel no moral obligation to take care of their own debt (CC, mortgage, HELOC, etc...). Weird world.

It would be much simpler if you impose restrictions based on income rather than age.

[turtle777]

Originally Posted by OreoCookie 

It would be much simpler if you impose restrictions based on income rather than age.

Well, yeah, but that should be factored into he Bank's risk model, not by government law.

The underlying problem is that IF the banks are still willing to lend at higher risk, no government law will sufficiently contain their risk anyways. They'll find other ways to satisfy their risk appetite. Because ultimately, the banks have learned by now that they are too big to fail and that they will be bailed out, if push comes to shove.

-t

[SpaceMonkey]

Originally Posted by Snow-i 

There is no fundamental economic problem presented here. You have not been able to to say anything other than "debt is bad" as though that it is sufficient. Show me how this demographic is affecting the economy. You can't, because its not. Its a moral crusade for the government to play parent...nothing more.

The moral hazard here is not being caused by the credit card companies or the students using the cards.

Student credit card debt has increased sharply over the last 4 years. I'm talking about a trend that will have larger effects 10-15 years out. You may disagree with the conclusion, but there is a legitimate economic interest for government here.

The moral hazard here is caused by the credit card issuers' ability to extend lines of credit to student applicants based on an assumption that their parents will bail them out. One way to mitigate this is to make sure that, if the student is financially dependent on their parents, that the parents have to assent. This is pretty common sense stuff, and it's how every other lender treats students, but the market incentives of the credit card industry have led to a different outcome that, overall, has negative consequences for students and, potentially, the economy at large.

[turtle777]

Originally Posted by SpaceMonkey 

Student credit card debt has increased sharply over the last 4 years. I'm talking about a trend that will have larger effects 10-15 years out. You may disagree with the conclusion, but there is a legitimate economic interest for government here.

Pfff, if the government is interested to help, they should themselves set a good example on how to manage finances and not go into debt.

It's so f***ing hypocritical that the government goes Trillions into debt, but tells the students that debt is bad.

-t

[ort888]

Originally Posted by Snow-i 

There is no fundamental economic problem presented here. You have not been able to to say anything other than "debt is bad" as though that it is sufficient. Show me how this demographic is affecting the economy. You can't, because its not. Its a moral crusade for the government to play parent...nothing more.

The moral hazard here is not being caused by the credit card companies or the students using the cards.

Debt is bad. If you go to any college campus you'll see tables set up with credit card companies getting unemployed poor college kids to sign up for credit cards. They do this because they want them to rack up a ton of debt and start down the path of credit card dependancy. They are not doing these kids favors. They want the kids to fail. They want the kids to rack up a ton of debt and get burdened with fees. That's the goal.

Cigarette companies aren't allowed to market to kids either or hand out free packs on a college campus. Is that an example of a nanny state? I see the two things as very similar.

[OreoCookie]

Originally Posted by turtle777 

Well, yeah, but that should be factored into he Bank's risk model, not by government law.

There are plenty of (apparently ineffective) regulations regarding banks -- and giving credit to someone who can't afford it can also be considered as a form of fraud (or at least a breach of good faith). However, more importantly, the question is whether you can make the requirement `the credit line should be coupled to income' concrete. Otherwise that part of the law becomes useless in practice.

[turtle777]

Originally Posted by OreoCookie 

There are plenty of (apparently ineffective) regulations

But WHY ?

Isn't it because the government doesn't let the strongest motivator for sound business play out, by taking bankruptcy off the table ?

This discussion and law could have been avoided if the banks that had reckless lending standards in the past would have been allowed to fail and liquidated, leaving only those banks in business that had sufficient lending standards.

But what the government does is the worst of all. Just look at Fannie and Freddie to see how reckless lending is encouraged by the government. AM I really to believe that they suddenly have everyone's best interest in mind with this law ?
Meanwhile, my special friend Barney Franks calls for LOWER lending standards for condo units. WTF ?

All I know is this: whatever the government does, it will NOT achieve the originally intended goal, and the side effects and unintended consequences are twice as bad.

-t

[OreoCookie]

Originally Posted by turtle777 

But WHY ?

Isn't it because the government doesn't let the strongest motivator for sound business play out, by taking bankruptcy off the table ?

-t

Because the government should protect the people from fraud.

[jokell82]

So this "think of the children!" mentality is now extending to adults - interesting.

[turtle777]

Originally Posted by OreoCookie 

Because the government should protect the people from fraud.

Wait a minute, the MOST FRAUDULENT organization in the country is supposed to protect me from fraud, meanwhile, ordinary citizens are ripped of left and right by higher taxes, re-distribution of wealth to benefit special interests, and unprecedented waste and abuse of funds ?







-t

[Snow-i]

Originally Posted by SpaceMonkey 

Student credit card debt has increased sharply over the last 4 years. I'm talking about a trend that will have larger effects 10-15 years out. You may disagree with the conclusion, but there is a legitimate economic interest for government here.

The moral hazard here is caused by the credit card issuers' ability to extend lines of credit to student applicants based on an assumption that their parents will bail them out. One way to mitigate this is to make sure that, if the student is financially dependent on their parents, that the parents have to assent. This is pretty common sense stuff, and it's how every other lender treats students, but the market incentives of the credit card industry have led to a different outcome that, overall, has negative consequences for students and, potentially, the economy at large.

There is plenty of economic interest for the government here...sadly, this is not in the interest of the people it is affecting and therein lies the moral hazard.

There is no evidence that this segment of the market is affecting our economy negatively. As such, any such claim that is made until that evidence is produced that college kids with high credit card balances are screwing our economy is invalid. You can say it as many times as you want but you still haven't shown any support for it.

[Snow-i]

Originally Posted by OreoCookie 

Because the government should protect the people from fraud.

No, the federal government shouldn't. Quite simply, its not their job.

[hyteckit]

Originally Posted by Snow-i 

No, the federal government shouldn't. Quite simply, its not their job.

What does the FTC do?

I believe one of their jobs is to protect consumers from fraud.

[andi*pandi]

wait, so banks giving loans to people who can't afford it for houses they can't afford, is bad, because, you know, the banks collapsed and and the economy nose-dived and all that. And yes, the banks were gambling too that people would pay just enough of their high-rate mortgages to keep solvent but yet keep accruing interest. The banks lost, but without the banks, the economy is lost. For want of a horseshoe or whatnot.

So the government, perhaps wanting to avoid a similar situation, is laying groundrules to prevent similar situations with credit cards, and this is bad also.

Perhaps the federal government is protecting not just needy college kids, but also the economy?

[hyteckit]

Originally Posted by ctt1wbw 

If you're under 21, unless you follow certain stipulations...

MSN Money

So what is next, you can't have a car if you're under 21? You can't own a house if you're under 21? You can't see an "R" rated movie if you're under 21? You can't wear swimming goggles in the pool if you're under 21? You can't own a pocket knife if you're under 21?

But yes, you can still serve in the military if you're under 21, but nope, no Budweiser for you!

The socialist government is getting closer and closer and more into your life every day. When the government tells you that you can't do something like have a credit card unless you do certain things, what's next?

I heard you can't buy sex toys in Alabama because conservatives in that state think adults in the state need to be protected.

What's next? Ban sex in exchange for money?

Damn socialist government!

[Snow-i]

Originally Posted by hyteckit 

What does the FTC do?

I believe one of their jobs is to protect consumers from fraud.

Okay, perhaps I was too general. Good point hyteckit.

That said, might I draw a distinction between criminal fraud and morally questionable practices which fall well within the boundaries of our laws?

The FTC protects against criminally fradulant practices.

This is nothing of the sort. This is the federal government trying to parent [b]legal adults[/i] and protect them from themselves. Its not their place, and their exerting power where they should have none.

[turtle777]

Originally Posted by andi*pandi 

wait, so banks giving loans to people who can't afford it for houses they can't afford, is bad, because, you know, the banks collapsed and and the economy nose-dived and all that. And yes, the banks were gambling too that people would pay just enough of their high-rate mortgages to keep solvent but yet keep accruing interest. The banks lost, but without the banks, the economy is lost. For want of a horseshoe or whatnot.

So the government, perhaps wanting to avoid a similar situation, is laying groundrules to prevent similar situations with credit cards, and this is bad also.

Perhaps the federal government is protecting not just needy college kids, but also the economy?

Government regulation is mostly nonsense, and in this case, it surely is.

Who created the easy money that the banks would hand out in the first place ?

The Fed.

So who do we need protection from ?

Right, the Fed and the government. They are screwing things up, and every time they promise to fix something, the mess gets bigger and bigger.

-t

[hyteckit]

Originally Posted by Snow-i 

Okay, perhaps I was too general. Good point hyteckit.

That said, might I draw a distinction between criminal fraud and morally questionable practices which fall well within the boundaries of our laws?

The FTC protects against criminally fradulant practices.

This is nothing of the sort. This is the federal government trying to parent [b]legal adults[/i] and protect them from themselves. Its not their place, and their exerting power where they should have none.

I'm sorry, but you have no idea what you are talking about nor what the FTC does.

Fall well within the boundaries of our laws?

Since Obama is passing a new law, I guess these credit card companies targeting adults under 21 without proof of income or have a co-singer, are no longer operating within the boundaries of our laws anymore.

[besson3c]

Snow: so what kinds of regulation are you in favor of?

[turtle777]

Originally Posted by besson3c 

Snow: so what kinds of regulation are you in favor of?

Could we stick to the topic of this regulation, just so we don't make things too broad to discuss it in a meaningful way.

-t

[ghporter]

Originally Posted by OreoCookie 

It would be much simpler if you impose restrictions based on income rather than age.

It seems that this concept has been lost on credit card companies for some time, especially when dealing with younger customers. If they were interested in establishing a business relationship with these young customers, they'd first be interested in ability to pay. When you see people in college deciding between buying scantron sheets for mid-terms or lunch because given their financial aid situation they can only afford one, I really find it hard to believe that there is any thought at all given to the student's ability to pay in the marketing of these cards to college students.

Originally Posted by OreoCookie 

Because the government should protect the people from fraud.

Exactly. I cannot help but believe that the credit card companies that market to 18 year olds EXPECT that they will be paid by the parents in most cases. Parents who apparently want to avoid saddling their children with bad credit records, but who were never party to the original credit agreement. Applying indirect but still obviously effective pressure on people to pay a debt that they don't owe smacks of fraud to me, even if it doesn't quite meet the obvious definition of the word.

[turtle777]

Originally Posted by ghporter 

Exactly. I cannot help but believe that the credit card companies that market to 18 year olds EXPECT that they will be paid by the parents in most cases. Parents who apparently want to avoid saddling their children with bad credit records, but who were never party to the original credit agreement. Applying indirect but still obviously effective pressure on people to pay a debt that they don't owe smacks of fraud to me, even if it doesn't quite meet the obvious definition of the word.

So what ?
Let them expect what they want, why does this matter ?
I don't know what kind of "indirect but still obviously effective pressure" you are talking about.

This regulation will foster more irresponsibility, and more and more people switching of their effing brains, and expecting that the government would provide all the thinking and common sense.

People need to know their rights, and then defend them. I need no government cranking out regulation, effectively telling me that I don't need to know and understand what's going on, but rather, that I should trust that the government regulates all things for everyone's benefit.

This doesn't sound, taste and feel American to me.

I want responsible citizens, and a government that encourages that. Right now, we are getting the complete opposite.

-t

[Snow-i]

Originally Posted by hyteckit 

I'm sorry, but you have no idea what you are talking about nor what the FTC does.

"Its principal mission is the promotion of "consumer protection" and the elimination and prevention of what regulators perceive to be harmfully "anti-competitive" business practices, such as coercive monopoly."

In other words criminally fraudulant practices.

Fall well within the boundaries of our laws?

Since Obama is passing a new law, I guess these credit card companies targeting adults under 21 without proof of income or have a co-singer, are no longer operating within the boundaries of our laws anymore.

Exactly the problem. The laws are being changed to further a politcal agenda of dependence and control over the general population. Obama is not my father. The federal government is not my keeper. That seems to be quickly changing however.

[ghporter]

Originally Posted by turtle777 

So what ?
Let them expect what they want, why does this matter ?
I don't know what kind of "indirect but still obviously effective pressure" you are talking about.

This regulation will foster more irresponsibility, and more and more people switching of their effing brains, and expecting that the government would provide all the thinking and common sense.

People need to know their rights, and then defend them. I need no government cranking out regulation, effectively telling me that I don't need to know and understand what's going on, but rather, that I should trust that the government regulates all things for everyone's benefit.

This doesn't sound, taste and feel American to me.

I want responsible citizens, and a government that encourages that. Right now, we are getting the complete opposite.

-t

That "effective pressure" is the implication that if the parents don't pay, the credit card company will make sure that the kid gets a very unpleasant credit rating-which they can do.

And how will making a lender check a person's ability to pay before offering credit make for more irresponsibility? Isn't failing to actually check ability to pay what sank the mortgage markets?

One of the jobs I expect my government to do is to keep enormous companies from rolling over me as a consumer. That's what things like truth in lending laws are all about. Taking advantage of 18 year olds' lack of experience and their parents' desire to protect their newly adult children is neither truthful nor a "level playing field."

I wholeheartedly agree that EVERYONE should be well educated on how credit works and what the details of a credit agreement mean. But at the same time isn't it also important to demonstrate to the citizens of this country that the government is WATCHING lenders? Isn't lack of oversight the biggest complaint people have about how "the previous administration caused this disaster" in the first place? Or are you saying that tens of thousands of young adults should be both pauperized and publicly humiliated simply because a faceless company can legally imply that their credit cards are effectively free?