Changing Attitudes About Credit to Protect Consumers

Rebecca Castell

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A group of consumer advocates gathered in Cleveland last fall to discuss ways to protect consumers from falling into the common pitfalls lenders have created. This group spawned a new consumer watchdog group called Americans For Fairness in Lending (AFFIL).

The group hopes to raise consumer awareness of lender practices including ever growing interest rates toping out in excess of 350%. AFFIL attributes these lending practices to american consumers changing views on borrowing money. Whereas Americans used to borrow sparingly and only in emergencies, for big ticket items, they are now borrowing money for most of their daily purchases. Using credit cards for everyday purchases has left many people vulnerable to outrageous default interest rates.

This changing attitude is partially attributable to the availability of credit. Teenagers are offered credit before they get out of high school. I recall being offered a new credit card in exchange for a tee shirt or other trinket on an almost weekly basis in college. This availability has increased the perception of being at the lender's control. Consumers have simply come to believe that there is nothing that can be done to change the rising interest rates and features such as arbitration clauses which benefit only the lender.

The AFFIL is hoping to make more changes such as the newly enacted law which caps interest rates made to military personnel at 36%.

I expect that groups such as AFFIL, combined with our new democratic leaders, will be able to really make a difference for the consumers in Ohio.