Show BABSON'S I TRUTH IN LENDING President Johnson has signed the Consumer Credit Protection Protection Protection I tion Act a measure designed- designed among other to things-to give buyers detailed information on the finance charges they pay for loans and credit purchases FULL DISCLOSURE REQUIRED Except in the case of installment installment in in- purchases costing 25 or less or 25 to 75 if fi finance finance finance fi- fi nance charges are below 5 or more than 75 if such charges are not above the law requires finance companies banks other lenders and retailers retailers retailers re re- re- re to make full disclosure of credit charges in writing Beginning July 1 1969 credit customers and borrowers must be informed of these charges in terms of annual percentage rates on the declining balance of their obligations and of the dollars and cents cost of financing fi financing financing fi- fi loans and purchases The housewife who buys at ata ata ata a department store on her revolving revolving revolving re re- re- re charge account must be told in writing how much she will pay in interest and carrying charges over the course of a year above and be and ond the purchase price of wh whit t she buys No longer will willit it be lawful for a finance company company company com com- pany or oi auto dealer to advertise advertise advertise adver adver- tise simply that you can buy I Item X for say 10 down and I 30 a month Dollar payment I totals and full annual charges must be spelled out I Commencing July 1 1970 a year after the truth in lending lending lend lend- i ing provisions take effect con I sumers who borrow will be afforded afforded afforded af af- af- af forded protection When unable to make scheduled scheduled scheduled sched sched- payments they will not be punished by unreasonable garnishment of salary The law exempts 75 per cent of the borrowers borrower's pay from garnishment garnishment garnishment garnish garnish- ment of salary And forbids his employer to dismiss him the first time his salary is garnished Of course the intent is to curb shyster lenders who overextended overextended overextended over over- extended credit and then promptly seek their pound of flesh via the garnishment route thus miring delinquent borrowers in financial quick quick- sand But this section could boomerang by deterring low- low I income wage earners from buying much of anything on onI I credit thereby hurting legitimate legitimate legitimate I mate and reputable retailers dependent on this business PROBABLE IMPACT ON LENDERS Most 1 lenders will find compliance compliance com with the truth in lending lending lend lend- ing provisions annoying and nd time consuming But the rules are sensible in the main man and retailers who extend credit as well as other lenders should not find it too hard to live with them and still prosper It is only the shoddy oPerators oper opel operators who have reason to fear Lenders will be screening credit applications more closely and I after fter midyear 1970 some m J find it necessary to refuse refet cr credit dit to very low income p because of the ga gr- gr provisions Retailing and money are highly competitive fidi Mii fi dL Both make extensive u use i t advertising in seeking cn o.- o. ers The new law require that such advertising be noc mn oa more explicit t as to itI and other charges than is 01 oi the case Gimmicks will bout b t bout tout out and with money co coi OS likely to continue high ad into the future it be bei i to see E a l pitches will be I the law effect goes into a x k I WILL CONSUMERS lERS B BLESS LESS Opposition to this Jaw largely from concern th 4 disclosure of charges charge foi COI and loans would crip e c cd sales upon which so W businesses heavily 1 was feared that once co coers con coos ers became aware of oC theU 1 total cost of cf borrowing t would have second tto that I But no such cutback occa OC in m Massachusetts first slat pass a truth in if E to teh We see no reason that the national I will he much different tot fig that observed in the Bay Ours is is now a decidedly ens t s swell oriented society Consumers Consume well trained in the art of OCI W rowing from tomorrow F. F w l i lI year more and more I cans are attaining Si d income and this security J p a still D b DI Der ber w to encourage I bu Ut er use of credit as assions become more Ui by expectation P o d I future income ne than by lus lions of current income I |