Consumers are increasingly defaulting on their credit card balances and banks are suffering because of the massive debt write offs due to the defaults. To remedy the situation, an alliance of financial industry interests and consumer advocates proposed a special program to the government. As legislative director for Consumer Federation Travis Plunkett says, "In this case we have a clear common interest."
Most of the biggest credit card banks are on board with a pilot program that allows lenders to forgive up to 40 percent of a borrowers debt, with the maximum forgiveness going to consumers nearing bankruptcy. Existing rules that allow for the reduction of principal require the debt to be paid in a matter of months, while the pilot program will allow the remaining debt to be paid over several years.
Do you think the pilot program is a good idea?