October 5, 2009
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News: BofA Pledges No Rate Changes Now
Senate Banking Committee Chairman Christopher Dodd (D-CN) and Financial Services Committee Chairman Barney Frank (D-MA) continue to diligently pursue Congress to move up the effective date of the new credit card reform legislation to December 1, 2009, from its present effective date of February 22, 2010. Concern is voiced that credit card companies are taking advantage of the extended length of time given to prepare for the new regulations to continue their abusive practices. Several major lenders including JPMorgan Chase and Discover Financial Services have already raised interest rates to get a jump on the new law. However, the nation's largest credit card company, Bank of America Corp. announced on Tuesday that it has no intention on raising interest rates on their customer accounts.
Senator Dodd and the other members of the committee were pleased by Bank of America's announcement and hope to see other credit card companies follow suit. In a letter sent to Senators Dodd and Frank, John Collingwood, Director of Federal Government Relations for Bank of America stated that the Charlotte, North Carolina giant was acting in response to growing customer concerns and to put their minds at ease. In his letter, Collingwood pledged that the Bank of America would not make any changes to interest rates or fees prior to the effective date of the credit card reform legislation. Bank of America also responded last month to an outcry that bank over-draft fees were too high by lowering those fees.
Senators Dodd and Charles Schumer (D-N.Y.) sent a letter to Ben Bernanke the Federal Reserve Chairman in April asking him to place an emergency freeze on credit cards interest rates for current debt. The Senators attempt to protect Americans from any further abuse by lenders failed when Bernanke turned down their request. A hearing will be held on Thursday before the House Financial Services Committee to discuss moving the legislation's effective date to December 1, 2009.