The economy is headed toward a recovery but the problems consumers have faced for the past two years have left a lasting mark on American memories. According to a recent poll where consumers where asked questions about credit cards, mortgages and other bank practices, Americans are seeking full disclosure from lending institutions. In addition to having all terms spelled out, consumers also support limits on fees and restrictions on certain practices that up until this point have gone relatively unregulated. Consumers overwhelmingly support the following changes:

• Banks shall be required to disclose all fees upfront with information presented in a clear and conspicuous manner.

• Prohibit large penalties for individuals who pay their mortgage off early.

• Prohibit banks from selling expensive loans to consumers who qualify for less expensive loans.

• Require banks to warn account holders (at the ATM) if their withdrawal will overdraw their account.

• Banks would be required to post and pay checks in the order they are received versus paying the largest check first.

• Limit credit lines offered by credit cards; specifically not allowing credit card companies to extend credit in excess of a person’s annual salary.

• Prohibit credit card companies from raising interest rates based solely on how other credit card accounts are managed.

While many of these changes would certainly benefit consumers, who will be responsible for monitoring the banks and credit card companies? It has been proposed that a new Consumer Financial Protection Agency be created to deal with the task of making sure financial institutions are complying with rules and regulations intended to protect consumers. This may become a reality in as little as a few weeks when the House Financial Services Committee is scheduled to consider legislation to establish this new agency.

These changes come as a result of banks and other institutions who were able to benefit from the bailout only to turn around and slam consumers with excessive fees and charges. This action not only angered many Americans but also made it difficult if not impossible for many consumers to survive the recession with their financial security intact. Those most affected by current lending practices are adults under 35 years of age, low income households and minorities. This is also the group that shows the most support for a new consumer protection agency.

While not everyone will agree with another government agency imposing more rules and regulation on the lending industry (as this sometimes backfires for consumers), the fact remains that many consumers are at a disadvantage when dealing with big banks. We can only hope that changes that may take place in the future benefit all consumers. Until that time it is up to each individual to carefully read and understand any financial agreement before signing on the bottom line. If you do not understand what you are signing you are taking a risk that may cost you in the long run.

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