Fed's Rate Cuts Bring No Relief For Consumers' Credit Card Bills
Nancy Trejos writes for the Washington Post about how the recent interest rate cuts by the Federal Reserve have not made it any cheaper for consumers where credit card interest rates have remained high and "in many cases have even climbed." Last Thursday, Rep. Carolyn B. Maloney (D-NY) introduced the Credit Cardholders' Bill of Rights Act of 2008 (PDF). In a press release, Maloney said “A credit card agreement is supposed to be a contract, but in recent years cardholders have lost the ability to say no to unfair interest rate hikes and fees. This balanced, moderate bill simply levels the playing field between card companies and cardholders while fostering fair competition and free market values,” said Rep. Maloney. Here's a one page summary (PDF) of Maloney's bill.
Congresswoman Maloney held a number of congressional hearings and meetings last year to determine how Congress, federal regulators, and credit card companies could work together to help improve services and protections for card holders. In August, she released a set of common sense principles, or “Gold Standard Principles,” aimed at guiding the shape and scope of “The Credit Cardholders’ Bill of Rights” as well as industry self-regulation. Her final bill is the careful, deliberative product of more than a year’s worth of study and analysis.
The Credit Cardholders’ Bill of Rights:
- Protects cardholders against arbitrary interest rate increases
- Prevents cardholders who pay on time from being unfairly penalized
- Protects cardholders from due date gimmicks
- Shields cardholders from misleading terms
- Empowers cardholders to set limits on their credit
- Requires card companies to fairly credit and allocate payments
- Prohibits card companies from imposing excessive fees on cardholders
- Prevents card companies from giving subprime credit cards to people who can’t afford them
- Requires Congress to provide better oversight of the credit card industry
- Contains NO rate caps, fee setting, or price controls
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