Before you pick a new credit card, check to see if it has this fine print

The next time you're in the market for a new credit card, it's worth comparing more than interest rates and rewards. Shopping around may enable you to dodge consumer-unfriendly "mandatory arbitration clauses," according to a new report from That fine print requires you to settle disputes via arbitration and prevents you from taking the company to court or joining a class-action lawsuit. This summer, the Consumer Financial Protection Bureau issued a rule that would have banned banks, credit card issuers and other financial firms from including arbitration clauses in their customer agreements. But in late October, Senate Republicans voted to kill that rule before it took effect. Mandatory arbitration clauses are already prohibited in mortgage contracts, under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. Active military servicemembers and their dependents are also exempt from mandatory arbitration clauses in many financial products, under the Military Lending Act. "Nobody goes shopping for a card with arbitration clauses as the primary thing on their mind, but it's another thing that's certainly worth considering," said Matt Schulz, senior industry analyst for "The last thing you want to have happen if something goes wrong between you and a credit card issuer is to have your options limited." Only nine of 30 credit card issuers have an arbitration clause in the cardholder agreement that cannot be avoided, the site found. The rest either don't have an arbitration clause or have policies that allow new cardholders to opt out. (See chart below.) Ideally, narrow Continue Reading

Wisconsin Department of Public Instruction, Evers ignore new law on rule making, suit says

The Wisconsin Department of Public Instruction is ignoring a new law which its backers say is designed to prevent overreach by state administrative agencies, according to a lawsuit.But a previous attempt to limit the department's power through legislation was found to be unconstitutional.The suit pits the Wisconsin Institute for Law and Liberty, a conservative public interest law firm, against state Superintendent of Public Instruction Tony Evers, who's seeking the Democratic gubernatorial nomination. The suit says Evers isn't complying with the Regulations from the Executive in Need of Scrutiny Act, also known as the REINS Act.The law, which took effect in September, says a state agency that wants to issue a rule must first submit a statement of the proposed rule's scope to the Department of Administration.The Department of Administration determines if the agency has the clear authority to issue the rule. It then reports that finding to the governor, who may then approve or reject the proposed rule. If approved, the agency can then submit its proposal to the Legislative Reference Bureau.Rules issued this fall by Evers' department have bypassed both the Department of Administration and Gov. Scott Walker, the suit said.That includes proposals involving aid for school mental health programs, open enrollment and an early college credit program.Evers, who's an independently elected official, believes a 2016 Wisconsin Supreme Court decision allows his department to ignore the REINS Act, according to the suit.In that decision, the court found that a law which limited the Department of Public Instruction's power was unconstitutional. But the decision featured five separate opinions issued by various justices which "left a number of legal principles in doubt," according to the institute's lawsuit.That suit says the new case involves significant legal and Continue Reading

State proposes stricter rules for credit reporting agencies after Equifax breach

ALBANY - In the wake of the Equifax security breach, the state on Monday proposed tougher regulations for credit reporting agencies. Under the proposed regulations, credit reporting agencies will be required to follow the same consumer protection standards the state already places on banks and insurance companies. When enacted, Equifax and other credit reporting companies like Experian and TransUnion will be required to register for the first time with the state Department of Financial Services by Feb. 1 and re-register on an annual basis. The state could deny a renewal if the company or those associated with it are deemed "not trustworthy and competent to act as or in connection with a consumer credit reporting agency,” according to the regulation. The firms will also be required to comply with the state’s cybersecurity standards. "The data breach at Equifax demonstrates the necessity of strong state regulation like New York's first-in-the-nation cybersecurity actions," said Financial Services Superintendent Maria Vullo. "This is one necessary action of several that DFS will take to protect New York's markets, consumers and sensitive information from criminals." Under the proposed regulation, consumer reporting agencies can be subjected to as many examinations by the state as the superintendent deems necessary. Equifax earlier this month revealed its system had been hacked between mid-May and July, putting at risk the private information of 143 million Americans, including potentially 8 million New Yorkers. "The Equifax breach was a wakeup call and with this action New York is raising the bar for consumer protections that we hope will be replicated across the nation," Gov. Cuomo said. Join the Conversation: Continue Reading

Wells auto borrowers want bank compelled to help repair credit reports

By Lisa Lambert WASHINGTON (Reuters) - Borrowers unwittingly charged for auto insurance when they took out car loans from Wells Fargo & Co asked a U.S. court on Friday to force the bank to help them repair their credit scores. As part of the class action in the U.S. District Court for the Southern District of New York, some of the 800,000 people who were charged unknowingly for unnecessary insurance filed a motion to have National General Insurance Company, Wells and the bank's dealer services "investigate and correct any and all inaccurate information that Defendants or their agents reported to Equifax, Experian, TransUnion" and other credit agencies. That would keep the borrowers from enduring "imminent, irreparable harm" because Wells had reported monthly payments made higher due from the erroneous auto insurance charges, purported delinquencies on the insurance, and other shortfalls. All U.S. lenders use credit reports to determine the amount of risk a potential borrower poses, and from there set interest rates in accordance with the likelihood the borrower will default or turn the person down outright. Low credit scores can cost borrowers thousands more in interest every year on mortgages, car loans, insurance, rent, and credit cards. Last week, Wells Fargo announced it would begin a remediation program this month going through the end of the year for 570,000 of the borrowers given improper car insurance that includes "working with credit bureaus to correct customers' credit records, if applicable," as well as refunds. Last Friday news broke Wells had enrolled 800,000 borrowers for collision insurance from National General without their knowledge or consent. Some customers repeatedly notified the bank they already had coverage, often cheaper, through another company, but still were charged the monthly premium. The bank has already had to go to court over its sales practices in the last year, after it was revealed that it had signed up Continue Reading

Bank of America posts $7.7 B loss, blames new credit card rules

Bank of America Corp. said Tuesday it lost $7.65 billion during the third quarter due to a charge related to credit and debit card reform legislation passed over the summer. In a dramatic shift, the bank also said it will change its consumer banking strategy to focus on providing customers with incentives to do more business with the bank instead of generating revenue through penalty fees such as overdraft charges. The new legislation that caused Bank of America to take the $10.4 billion charge limits fees banks can collect when merchants accept debit cards. BofA said that change would reduce future revenues in its card business. "We are adapting to the regulatory environment," CEO Brian Moynihan said in a statement. Excluding the one-time charge, Bank of America earned $3.1 billion, or 27 cents per share, in the three months ending in September. That easily topped the 16 cents per share analysts polled by Thomson Reuters were expecting. Analysts don't typically include special charges in their estimates. The better-than-expected results were due mainly to a sharp drop in losses tied to defaulting loans. The bank set aside $5.4 billion to cover bad loans during the third quarter, compared with $11.71 billion during the same quarter last year. JPMorgan Chase & Co., which reported results last week, also benefited from a big drop in losses from failed loans. BofA has already started introducing components of its new strategy. For instance, it offers free checking to customers who use its "eBanking" channel or solely use online banking. The bank plans to begin testing new offerings in December that will reward customers for using certain kinds of banking products or keeping higher balances. A drop in defaults is a sign that customers could be regaining their financial footing after the recession, which led to widespread defaults on mortgages, home equity loans and credit cards. Bank of America and other banks have been stung in recent weeks by Continue Reading

Credit card hike fright: Banks raising rates, even if you’ve paid on time

By the time Rosa LoBianco realized the interest rate on her credit card had been hiked to a harsh 22.17%, it was too late.The Queens single mom always paid the bill on time and had no reason to think her rate would go up. Big mistake. When she saw the bad news on her card statement last month, she called Washington Mutual. The customer service rep said she'd missed her chance to reverse the rate hike. "I know the economy is not the best, but do the banks really need to take advantage of us?" said the 46-year-old NYPD crossing guard, who lives in Auburndale. "They're making up all these rules to get more money out of hardworking people who are trying to make ends meet." Consumers beware: As if you didn't have enough to worry about, numerous banks are raising interest rates even on credit card users who make their payments on time, every time. The list includes JPMorgan Chase, which acquired Washington Mutual, and Citigroup, Bank of America and Capital One. "The same companies taking federal bailout money with one hand are crunching cardholders with the other - and cardholders are the taxpayers who are bailing them out," said Russ Haven of the New York Public Interest Research Group. Fighting the trend is tricky. Bankers can jack up the rates because the fine print in the agreement says so. Federal rules that will partly curb the bankers' behavior don't take effect until the middle of next year. They're also tightening their definitions of what makes for a risky customer - and blaming the economy. "The overall credit environment is challenging," said Pam Girardo of Capital One. Banks may decide the amount of credit you're using is too high or fault you for paying just the monthly minimum. "Your situation hasn't changed; your bank's risk tolerance has changed," said Gail Hillebrand of the Consumers Union. "And you suffer the consequences." Expect a rate hike if your credit score drops. Some banks check customers' credit reports every month, even if they pay on time, Continue Reading

After 13 years, Carmel can annex Home Place, appeals court rules

The Indiana Court of Appeals unanimously ruled Tuesday that Carmel can continue its annexation of Home Place. Carmel has been trying to annex the area for more than a dozen years, part of its strategy to incorporate all of Clay Township. It's now the only township area not inside city limits. Attorney Stephen Buschmann, who represents Home Place, said he and his clients are reviewing the ruling and have 30 days to determine how to proceed. Matt Milam, leader of the Concerned Citizens for Home Place, said residents would vote Nov. 19 whether to appeal the decision to the state Supreme Court. Milam, though, anticipates they will choose to keep fighting. He said many residents fear that Mayor Jim Brainard could decide to redevelop the area, and they think he spends too much money."The mayor is like a kid at college with a credit card," Milam said. "The mayor goes out and every time he needs some new money, he just goes out and gets a new credit card."Brainard declined to comment because litigation is pending.The dispute began in November 2004, when the Carmel City Council voted unanimously to annex the community, bounded generally by 99th Street to the south, Pennsylvania Street to the west, 111th Street to the north and Westfield Boulevard to the east. The community has about 2,200 homes with about 5,000 adults. Worried about a tax increase and not wanting to be under Carmel's control, many contributed financially to file a court case in 2005 against the annexation. Hamilton Superior Court 3 Judge William Hughes ruled in 2005 that Carmel could not annex Home Place because he said it had not established an adequate plan for financing city services for the area.  More: Carmel financial adviser swindled clients out of $2 million, authorities say More: Carmel's Christmas market, ice rink set to open in November More: Booming growth appears over for Carmel, Noblesville, HSE Continue Reading

Be wary of that ‘free lunch,’ and free credit report offers

Sometimes you can bend the rules. Other times, you just have to follow them to get what you want. Remember that when you go online to get those free credit reports you're entitled to every 12 months. There's only one place to get them - no matter what you may think you read on other Web sites. Natalie Meyer, for instance, thought she was getting a free credit report when she logged on to a site called "They advertised the report was free, but charged me $9.95 for it," she complained., one of many providers of online credit reports and credit monitoring services, boldly offers to provide "free credit reports" in seconds. You have to read the fine print at the bottom of the Web page to discover that free is not what it seems. When you order a free credit report from the site, you're automatically enrolled in a 30-day trial of credit monitoring. "You will be billed $9.95 for each month that you continue your membership if you do not cancel your membership within the 30 day trial period," the site states. If you mistakenly try to access your free credit reports through a site like this, cancel any membership services as soon as possible. In the past 36 months, nearly 400 consumers have filed complaints about with the Better Business Bureau, many over billing disputes. Under the Fair and Accurate Credit Transactions Act, you're entitled to a copy of your credit report once every 12 months, from each consumer credit reporting company , including the big three - Equifax, Experian and TransUnion. The law required the three major credit-reporting agencies to establish a central source for distribution of the free credit reports. To order yours, click or call (877) FACT-ACT. You cannot request free credit reports through the Web sites of the individual credit reporting agencies or from any other Web site other than Asa Aarons is a consumer reporter who Continue Reading

Here’s score on employer’s access to your credit report

Be careful - very careful - where you get your facts, even when the source is something as solid as a major financial corporation.VISA USA recently announced only 20% of Americans know prospective employers can legally screen job applicants based on their credit scores. The survey claimed 52% mistakenly believe it is illegal for employers to use credit scores as hiring criteria."A bad credit score can send an otherwise well-qualified job applicant straight to the unemployment line," said Jason Alderman, director of financial education for Visa USA.So can bad information. Contrary to what VISA USA suggests, prospective employers generally do not have access to an applicant's credit score. None of the big three credit reporting agencies provides scores as part of employment credit checks. Neither does ChoicePoint, one of the largest third-party providers of identification and credential verification services."But they could," Alderman said. "Just because they don't now doesn't mean they won't in the future."Under the federal Fair Credit Reporting Act, potential and current employers can order consumer reports for employment purposes such as hiring and promoting. But the employer is required to obtain written consent from the applicant or employee before accessing the file and must follow specific rules if the applicant is rejected because of information in the report.For preemployment credit reports, the three major credit bureaus use a special reporting format that suppresses credit scores and credit card account information that is considered irrelevant to hiring decisions. Most data providers also leave out the applicant's year of birth and any references to a spouse, such as joint credit accounts, to keep the potential employer from inadvertently violating equal employment opportunity laws.Employers are allowed to run credit checks on job applicants in most states, including New York and New Jersey. But those state laws, like federal law, require written consent Continue Reading

Stay thrifty! Sales tax rules same for secondhand garb

Most consumers resent what they consider unnecessary fees, whether extra sales tax or a charge for a credit score. Lorice White of Queens asks, "What are the laws pertaining to taxing of secondhand clothing and merchandise? Thrift stores and resale shops in New York generally charge sales tax on everything sold in their stores." If they do, speak up. The sales tax rules apply whether you buy something new or used, but most clothing and footwear costing less than $110 per item or pair are exempt from New York State sales tax. Depending on where the store is located, those items may also be exempt from local sales taxes. You don't pay any local sales tax on clothing and footwear costing less than $110 in New York City. But you'll pay at least 3% in Westchester County and 4% in Nassau and Suffolk counties. Norma Joseph of Brooklyn understands federal law gives her access to a free credit report from each credit-reporting agency every 12 months. But she doesn't think the law goes far enough. "I take issue with the fact that I have to pay to obtain my credit score along with my credit report. Why is that?" she asked. "If I can get my credit report free of charge, why can't I get my credit score along with it?" It's just the way the law was written. The Fair and Accurate Credit Transactions Act of 2003 - commonly known as the FACT Act - made it possible for consumers nationwide to get free annual copies of their credit reports. But although the FACT Act requires consumer credit reporting agencies to provide credit reports free of charge, it does not require them to provide credit scores free. Under the law, they can charge a "fair and reasonable fee" for the scores, as determined by the Federal Trade Commission. If you apply for a home loan, however, you may be able to get your credit score free. If your lender uses credit scores, it is required to provide it to you free of charge. Asa Aarons is a consumer reporter on WNBC-TV, Channel 4. His special Continue Reading