February 2, 2010
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News: Indiana Senator Fighting Back
There must be another way to pressure credit card companies into doing what's right for the financial industry as well as Americans. What aimed to rein in the deceptive and unfair practices of lenders has only led the financial industry to find even more creative ways to undermine new credit card reform legislation. The action has left lawmakers no alternative but to find creative ways to fight back. Indiana State Senator, Brandt Hershman, is not content with how credit card companies have taken advantage of the nine months they were given to prepare and distribute new documents that align with the new legislation. Most card companies have found loopholes in the law and have changed interest rate and fee structures to avoid regulation.
Hershman has introduced legislation that would prevent the State from doing business with any credit card company or bank in Indiana that charges high interest rates on card products. If passed, the new bill would apply to all banks currently doing business with the State as well as any in the future. If banks want to be considered by the State, they will need to refrain from charging a credit card interest rate above 21 percent to any cardholder with a good credit rating.
In a press release, Hershman said that the State deposits taxpayers' funds into more than 100 various financial institutions throughout Indiana. He wants the State to cease investing into any of the organizations that are "issuing credit cards with unfair interest rates and forcing their customers with good credit histories to pay unjustified charges." When introducing the bill, Hershman noted the dramatic increase in card interest rates that have taken place over the past few years. He also pointed out that rate increases have not been just limited to subprime cardholders, but to prime cardholders who pay on-time as well; and, while taxpayers have been forced to rescue Wall Street and failing banks from near bankruptcy, these same organizations have trampled and beaten them down.