Sunday, November 16, 2008

Government Says No to Banks Wanting to Forgive Credit Card Debt

Financial Services Roundtable and the Consumer Federation of America had their request of a special program forgiving the credit card debt of those failing to qualify for repayment plans rejected by the Office of the Comptroller of the Currency.

The program would’ve involved some 50,000 people struggling with credit card debt and allowed up to of 40% of debt to be forgiven on an individual basis based on their financial situation with the remainder of debt being paid back over several years.

The government objected to the plan which would've allowed banks to defer losses for years on the forgiven debt. Timothy Long, senior deputy comptroller for bank supervision policy, said that "any such proposal cannot be viewed favorably by us." via