October 22, 2009
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News: The Credit Card Bust on Capital Hill.
Most who follow credit card industry news at all, already know about the latest initiative of the House Financial Services Committee. Because of the unethical abuse perpetrated by some of the major credit card lenders, Barney Frank, chairman of that committee is taking serious action. Pertaining to the upcoming CCARDA consumer credit card protective mandates, many banks have made a mad rush to circumvent the purpose of this protection during the 15-month grace period they were given to comply.
CCARDA (Credit Card Accountability Responsibility and Disclosure Act of 2009) was put into law back in May but the industry was granted 15 month of grace with which to comply. Since May, the credit card industry has rampantly set out to defeat the effect of the bill. The two main targets have been, skirting CCARDA's provision to:
<()> Protect consumers from having their credit card interest rates suddenly hiked (as much as a 20% increase) for no justifiable reason and to:
<()> Apply that new rate hike to back-debt.
To defeat the first protective mandate, the major credit card have hastily switched millions of "fixed-rate" accounts to "variable-rate" accounts. With variable-rates, the lenders can hike everyone's interest anytime they want and without any wrong-doing on the part of the consumer.
As far as the second protective mandate listed here, it has already been defeated in millions cases by having interest rates hiked before compliance of CCARDA becomes mandatory. Credit card consumers already carrying large debt will see the interest penalty more then double the cost they agreed to when they charged the debt months or years before.
As a result from public outcry, the House Financial Services Committee has already taken swift action. They have already composed a bill to greatly shorten the compliance grace period from mid-February of next year to December 1 of this year. The bill is already being fashioned for a vote by Congress, who are also very disgusted and frustrated by the credit card industry’s unscrupulous and irresponsible actions.
With most of the damage already done, many of the large credit card lenders have already backed off from these practices any further. It’s just too bad for the millions of victims who have already been afflicted.