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article imageHouse bill to enact credit card rules early as banks hike rates

By Kay Mathews     Sep 24, 2009 in Politics
In the interim between the passage of the CARD Act and implementation of some of its provisions, banks hiked credit card rates by 20% and changed terms. Members of US House seek to enact provisions early to thwart “anytime, any reason” changes.
Representatives Carolyn Maloney (D-NY) and Barney Frank (D-Mass.) proposed the ‘‘Expedited CARD Reform for Consumers Act of 2009” on Thursday, reports CBS Money Watch.
The lag time between the passage of the Credit Card Accountability, Responsibility and Disclosure Act (CARD Act) and implementation of certain provisions in the law has given banks ample opportunity to raise interest rates on credit cards and they have done so.
Rep. Maloney, the author of the CARD Act, was quoted as saying, "It’s clear that credit card companies are taking advantage of this period between the signing of my bill and the current effective date. The breadth and depth of the rate hikes happening now point to the need for faster consumer protections.”
Pew Center Research found that, over the past few months, the largest credit card issuers have increased interest rates by 20 percent, significantly decreased borrowing limits, and cancelled credit cards on "millions of innocent borrowers."
Passage of the "Expedited CARD Reform for Consumers Act of 2009” would mean that provisions of the CARD Act would go into effect on Dec. 1, 2009 instead of Feb. 2010.
The bill announced by Maloney and Frank would, according to Nick Bourke, manager of the Pew Safe Credit Cards Project in Washington, D.C., "demand that card issuers abandon 'anytime, any reason' changes in terms, hair-trigger interest rate boosts on existing balances and a series of other controversial practices at least three months early," reports CBS Money Watch.
Banks are not pleased with this news. CBS Money Watch quotes the prepared statement of Richard Hunt, president of the Consumer Bankers Association:
Changing the implementation date in the middle of a significant process already underway puts credit card customers at risk of not being properly informed. More time is needed to adequately describe these significant changes to customers so they fully understand how their accounts will be managed.
Customers, however, seem properly informed when it comes to the drastic changes in their accounts that have taken place since the passage of the CARD Act. According to CBS Money Watch, the ‘‘Expedited CARD Reform for Consumers Act of 2009” is a direct result of "consumer complaints about hiked rates and changing terms in the months following the CARD Act’s passage."
More about Card act, Credit card, Rates, Greek banks, New rules
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