March 30, 2009

• What is Sen. Dodd's CC Reform Bill About?, Pt.2
    The rest of the CC Reform stuff.

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  Continuing with several more points, Sen. Dodd states "When consumers pay a price, the economy pays a price," adding that his legislation would stop the "outrageous gouging" that is occurring in the credit card system. He is very confident that these credit card protections which did not get through Congress last year because of time constraints, will make it through this year. Most of the remaining points follow are:

  • Marketing credit cards to youth: Preying on students would be regulated more closely. Consumers under the age of 21 must not be offered credit cards without a parent's or guardian's consent.

  • No more "any-time, for any reason policies: Arbitrary rate hikes and other important contract provisions will be required to present ‘reasonable cause'. Approval will be required before hiking credit card APRs.

  • Reasonable time to make payments: A minimum time limit would be mandated giving consumers time to make payments. § Delinquency statii: Categories and the appropriate measures that banks are allowed to take concerning these will be standardized.

  • Other areas: The existing federal rules have missed or incompletely covered other issues that will also be attended to.

  Interchange Fees: One more very important feature which benefits credit card consumers indirectly by lowering what they have to pay at the counter is ‘Interchange fees'. These are charges as a percent of every transaction, placed on the merchants in order to accept credit cards from their customers. This is the way associations like VISA and MasterCard, make most of their money. The merchant and retail industry are in a uproar because they have no bargaining power to curb excessive fees and rates. They regret having to pass all this extra cost on to their customers. So, the GAO (Government Accountability Office) is going to conduct a study as to the effects this is having on the economy. The House, the Judiciary Committee is currently examining the problem.

  Meanwhile, Rep Carolyn Maloney, (D-NY) is moving a similar bill through the House. Sen. Dodd has voiced that he believes Ms. Maloney's bill is a "little too weak", but has committed he is interested in working together with her. Ms. Maloney, at least, has committed to have her bill in effect within 90 days of it being signed into law.

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