February 14,2009
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News: Dodd Debunks 'Deadbeat Card-Holder' Myth.
The reflection invoked by Senator Chris Dodd (D-Conn) was: "Are you a 'deadbeat' because you're a nightmare to them ... The ideal customer's someone who owes [the lender] forever." The myth here is that credit card consumers who pay off their credit card balance every month is a deadbeat because the lender isn't making any money off them. Sen. Dodd has spent the last 20 years trying to get legislation passed to protect the credit card consumer from the card industry.
On Thursday he chaired a hearing before the Senate Committee on Banking, Housing and Urban Affairs. The hearing was focusing on regulation to curb certain unfair and oppressive practices of the credit card industry toward consumers. The intent of this move is to initiate a bill within the next few weeks that will shore up the Federal Reserve in its endeavor to correct credit card industry abuses that have already been addressed.
Dodd had already introduced this new legislation, titled: "the Credit Card Accountability, Responsibility and Disclosure Act" last year. Also, only two months ago, the Federal Reserve had released new, similar regulations that would protect credit card consumers.
So, why this seeming redundancy of Congress repeating the same steps? The reason is that nothing's being done today The new federal credit card regs aren't scheduled to take effect till July of next year. Right now, these regs have no 'teeth'. In addition to the robustness of the new federal laws over agency regulations, Sen. Dodd is also concerned that these regulations could be changed anytime on a whim. This would not be the case with federal law.
Sen. Dodd explained that with "Americans losing 19,000 jobs a day, and 10,000 homes", Congress is finally realizing that consumer protection and economic growth are not antagonistic to each other but, tend to be amendatory to one another. He concludes: "This is a critical one. People are more likely to pay their credit card debt than their mortgage."