July 8, 2009
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News: Dodd Calls For Immediate Action
We have all heard about the new credit card reform act that was signed into law by President Obama in May. The new law is aimed at ending the deceptive and unfair practices of financial institutions. Unfortunately, as of late, we have also witnessed the onset of more unscrupulous activities by financial institutions as they rush to impose more unfair fees and interest rate changes prior to the effective date of the new legislation. As a credit card consumer, I have been anxiously watching and wondering why our government is sitting back and allowing these companies to participate in the same practices covered by the new law they developed to stop such predatory action. Once again coming to Americans aid is Senator Christopher Dodd (D-CT), Chairman of the Senate Banking Committee, is asking lawmakers take measures to review all credit card rate hikes back to January 1 of this year.
Dodd sent a letter to Federal Reserve Chairman Ben Bernanke and other regulators asking them to force credit card companies to follow the look-back provision of the new legislation that requires credit card companies review the accounts that have had interest rate increases every six months. Dodd asks that lenders begin reviewing all card accounts that have had such rate increases since January 1, 2009. Furthermore, Dodd asks that lenders reduce the interest rate if the customer has paid as agreed since the rate increase or if the conditions that caused the increase no longer exist.
In his letter, Dodd said that the look-back provision will only accomplish its purpose if it is properly enforced. Certainly giving credit card companies nine months grace period before the law becomes effective has given them an opportunity to increase their abusive activities. Supporters are asking President Obama and the Federal Reserve just how committed are they to protecting Americans.