Financial Crisis Timeline: May - July 2009 (Part 7)

February 20th. 2018

May 19, 2009

The U.S. Senate passes a credit card reform bill, and President Obama signs what will be known as the Credit Card Accountability Responsibility and Disclosure Act of 2009 the following day.

Amidst huge of public bailout dollars being doled out, predatory lending practices in the credit card industry became the target of legislators and a public that had grown furious with the banking industry. The credit card industry's use of arbitrary interest rate increases, high fees, and default rates scrape the boundaries of legality are now a target of the President.

Among many provisions under the bill, credit card issuers will have to give significant notice of payments due, and cannot arbitrarily charge raise rates on credit card holders for a host of reasons.

Here is the full version of the bill.

May 2009 Staten Island real estate market

A total of 173 single and two family home units sold in May. While this number is still below 200 sales, it's now this third straight month of small volume gains. However, inventory still stands at over 18 months.

June 2009

Positive news begins to take shape. NAR National Association of Realtors announces existing home sales were up 3 straight months nationwide.

Jun. 25, 2009

The Cash for Clunkers bill is signed into law by President Barack Obama. The program gives rebates of $4500.00 to trade-ins in exchange for the purchase of a new more fuel-efficient car. The program is widely considered a huge success, driving a huge spike in auto sales.

Jun 30, 2009

Bernard Madoff is sentenced to 150 years in prison for operating a multi-billion-dollar Ponzi scheme.

June 2009 Staten Island real estate market

The real estate market sees more positive news this month as it steps over the 200 unit sales mark. Our market and many others are being spurred by the first time homebuyer tax credit and historically low interest rates.

News about an improving Wall Street also helped build confidence the economy was getting a bit better.

July 2009: Truth in lending regulatory reform

The Federal Reserve Board proposes sweeping reform to Regulation Z (Truth in Lending), with the intent to improve disclosures given to consumers concerning non-fixed mortgage terms.  The law will require full disclosure of mortgage payments on ARM's and other exotic mortgage products that are not fixed.

Mortgage broker and loan officer compensation will be targeted under the new reform law, as it prohibits compensation based on a loan's interest rate. It also prohibits lenders from steering consumers to mortgage products that are not in their best interest, in order to increase their own compensation.

 

Photo Source: Flickr User BiggestCarBuyers

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