COMMENTS: Banking Baloney

The day's other economic news came from the Federal Reserve Board. It announced consumer protection regulations for credit cardholders, including a ban on retroactive increases in interest rates on unpaid balances and on immediate due dates for payment of current bills. CBS' Nancy Cordes and ABC's David Kerley both covered the proposal. Cordes called it "the toughest crackdown ever" on practices the Fed called "deceptive and unfair." She warned that the banks will "bring out their big lobby guns to try to shoot as many holes in this proposal as possible." ABC's Kerley cited the banks' warning that if implemented "consumers may actually pay more." He quoted Sen Christopher Dodd's response: "A lot of baloney."

The credit card story came on the second day of Elisabeth Leamy's two-part series Stealing You on identity theft for ABC. Thursday Leamy demonstrated how a stranger's personal data can be bought online, brokered by organized crime gangs based in eastern Europe and Russia. She shocked a California man with her purchase of his Social Security number, mother's maiden name, credit card account number and PIN for his ATM card. In part two, Leamy bought a $500 scanner online that allows credit and debit cards to be cloned by copying their magnetic stripes. "More than 65 other countries now use smart chip technology that makes card cloning almost impossible." Domestic cardholders are vulnerable because banks here still use the clonable magnetic stripes instead "to avoid the cost of converting ATMs."


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