October 22, 2009
-
News: BofA Urges Credit-Card Ethics; Few Takers
It's no secret that credit card consumers are up in arms. Amid what might become class actions against Cap 1 and the thousands of consumer complaints pouring into Washington, legislation is now being introduced to Congress. The rampant and flagrant abuses purpetrated by some large credit card lenders is bringing the entire credit card industry to bear.
After being thrashed in California and now facing allegations in the Southern District Federal Court in Florida, the congressional House Financial Services Committee has already taken action against the entire credit card industry. It's unfortunate that when one large lender like BofA leads the way in ethical discipline and invites the other large lenders to join the movement, there appear to be no takers.
What's at stake here is a loss of almost three months of grace originally granted to the industry in order to gear up for major changes imposed by the recent CCARDA legislation signed into law back in May. CCARDA (Credit Card Accountability Responsibility and Disclosure Act of 2009) legislation will make sweeping changes in what the industry is allowed to do in the future. So sweeping, in fact, there is serious concern of the adverse effect on the smaller lending institutions.
BofA has lead the way by settling with California with $35 million dollars to make things right over "over-draft fees" and, now, offering to hold-the-line on any further credit card interest rate hikes. Sadly though, the other large institutions have failed to follow suit.
The shortening of the grace period from mid-February of next year to December 1 of this year is being considered in Congress at this writing. Undoubtedly, our congressmen will put much weight of their decisions based on what they see the credit card industry doing at the time they vote. Kudos for BofA, at least.