Will Congress Force Credit Card Reform?
April 8, 2009 by Miranda Marquit
Filed under Finance
It seems like one of the perennial pieces of legislation that comes up in Congress is credit card reform. Last year, the Federal Reserve voted on new rules to go into effect in 2010, meant to protect consumers from such credit card practices as two-cycle billing and raising interest rates for unrelated charges. But some feel that these rules don’t go far enough — or go into effect early enough. However, rarely does anything resembling credit card reform happen in Congress. Representatives concede that it’s just not right. Some member of Congress routinely introduces a credit card reform bill only to have it languish and die. But this year could be different.
Will populism force Congress to take a serious look at credit card reform?
Populist outrage has been strong lately. The “regular” folks are sick of the “fat cats” having all the rules rigged in their favor. And Congress may have to listen. Politicians are worried that maybe — just maybe — their constituents are mad enough to vote them out of office if they keep catering to the lobbyists and the interests of the already rich. The most recent credit card reform bill might just be the way for Congress to show “we the people” that they are serious. Here are some of the highlights of the bill (which just barely squeaked through a Senate committee):
- Keep credit card issuers from making unilateral changes to the contract.
- No marketing to youth under the age of 18.
- No more fees for over the phone payments.
- No raising interest and fees due to changes in credit score or changes with other credit card companies.
- No credit card for those under 21 — unless the person can pass a financial literacy test or if the person gets a co-signer.
- No more fees for inactivity on gift cards.
Some of these measures are rather tough, and it is unlikely that the bill would pass with all of them in. The credit card reform bill might have to be amended and compromised on if it is to pass. Otherwise consumers will just have to wait until next year, when the Fed rules take effect, for some measure of protection.
If you are interested, you can contact your elected representatives and share your opinion of the credit card reform bill.
What do you think of the proposed rules for credit card issuers?
image source: Channel R via Wikimedia Commons
Definitely needs to be done! Are you kidding me? This should have been done a LONG time ago.
I don’t have much faith that Congress has the “little guys” best interests at heart….. nor do I have much faith that the cure won’t be worse than the disease. Best for consumers to take matters into their own hands, cut back on credit card usage, and pay off balances on time.
I agree that we definitely need some reasonable protection from predatory practices. While I do think that we are responsible for our own poor decisions, at the same time we also need some sort of protection. It’s not right that the credit card companies can do some of the things they are doing — especially to those who have been responsible.