September 17, 2009
-
News: Banks Abuse Sparks Call To Action
The news is out and we have all witnessed the major credit cards companies jumping on making changes to contract terms in an effort to beat out the new federal rules that will be taking effect in February 2010. Some lawmakers have seen it too and want to crack down on these lenders. Representative Barney Frank, Chairman of the House Financial Services Committee, does not want to give credit card companies any additional time to implement unfair practices against Americans. Frank wants new legislation that will move the effective date for the Credit Card Accountability Responsibility and Disclosure Act from its current February 2010 date to January 1, 2010.
Law makers say that their offices have received multiple complaints that their credit card company has raised their interest rates as well as other fees and penalties. Most major lenders including JPMorgan Chase, Bank of America, and Discover have made changes to credit card interest rates and fees after President Obama signed the new legislation that would prohibit many of these moves. The new legislation also has provisions that will prohibit lenders from raising card interest rates because of late payment and requires lenders apply payments to the higher interest rate bearing debt first.
Rep. Carolyn Maloney (D-N.Y.), the lead sponsor of the original credit card reform bill in the House, supports Representative Frank's intentions to introduce the new legislation. Senate Banking Chairman Chris Dodd does not appear to be as supportive of Frank and believes it could be a difficult move to make. Frank's opponents on the matter, mainly the American Bankers Association, says they are willing to work with the Representative, however, maintain such a movement would only serve to further limit credit availability. However, it hard to believe that moving the inevitable up 30 to 60 days would have much of an impact on credit availability. Frank supporters might be inclined to respond that the association needs to come up with a new line in defense of lenders abusive practices.