0 Comments
About the author: Ed Roberts is a seasoned financial industry reporter and contributor to ATM Marketplace. To submit a comment about this article, contact the editor, Tracy Kitten.
 
WASHINGTON - Amid complaints about disclosures and fees, Congress appears poised to enact new credit-card reforms.
 
"Generally, I'm in favor of market-based solutions whenever possible; but in this case, I am not convinced that is possible," said Rep. Carolyn Maloney (D-New York), chair of the House Financial Services Subcommittee on Financial Institutions. 
 
Maloney is holding a series of oversight hearings on the growing number of complaints about the credit-card industry in preparation for reform legislation. A similar process is being conducted by the Senate Banking Committee, making it likely some kind of reforms bill will be enacted.
 
Several bills that would ban universal default practices, in which a default on unrelated debt can trigger higher rates on credit cards, and double-cycle billing, in which consumers are charged interest on debt that has already been repaid, have already been introduced. And another bill that would prohibit extra charges for paying online or by phone, as some issuers do, also is expected to hit the floor.
 
Other bills aim to increase disclosures about the billing practices of issuers.
 
Linda Sherry, a representative of Consumer Action, testified during the hearing. She said a recent survey found that nine of the 10 largest credit card issuers say they reserve the right in their contracts to change annual percentage rates and other terms at any time. She asked for legislative action to curb the practice.
  
Witnesses also testified about shorter grace periods on payments and shorter billing cycles, which cardholders know little or nothing about.
 
"The reality now is, there is such a thing as death by plastic," said Rep. Emmanuel Cleaver, (D-Missouri).
 
Edward Yingling, president of the American Bankers Association, agreed the current system of credit card disclosures is not working. But he put the blame on the increasing complexity of the products.
 
The ABA chief said the banking industry has undertaken a comprehensive campaign to educate consumers about finance and the ramifications of credit card agreements in particular.
 
Yingling also noted that the Federal Reserve is reviewing its regulations regarding credit card disclosures and is expected to propose reforms in the future.
 

Related Content

Reader Comments

Add a Comment

We welcome your thoughtful comments. All comments will display your real name.

Want to participate in the discussion?

Or log in for complete access.

  • Clear
  • Post
Be the first to post a comment for this story.
Products & Services

TMD Security CPK+ 6000/6001 series model 1

http://global.networldalliance.com/new/images/products/481.png

481/TMD-Security-CPK-6000-6001-series-model-1

New Economical, Attractive 5800 ATM Enclosure Series

http://global.networldalliance.com/new/images/products/657.png

657/New-Economical-Attractive-5800-ATM-Enclosure-Series

Sentinel™ Alert Notification System

http://global.networldalliance.com/new/images/products/4257.png

4257/Sentinel-Alert-Notification-System

TMD Security CPK+ 6000/6001 series

http://global.networldalliance.com/new/images/products/951.png

951/TMD-Security-CPK-6000-6001-series

KingTeller – A5 Enhance TTW ATM

http://global.networldalliance.com/new/images/products/4236.png

4236/KingTeller-A5-Enhance-TTW-ATM

Get Your Brand Noticed At Any Location

http://global.networldalliance.com/new/images/products/4445.png

4445/Get-Your-Brand-Noticed-At-Any-Location

KingTeller- A4 Enhanced Lobby ATM

http://global.networldalliance.com/new/images/products/A4_100.gif

1145/KingTeller-A4-Enhanced-Lobby-ATM

Cash Forecasting

http://global.networldalliance.com/new/images/products/CashFlow_100.gif

645/Cash-Forecasting

QuickWay Printer

http://global.networldalliance.com/new/images/products/Itautec_QuickWay.gif

737/QuickWay-Printer

Data Replay Tool (DART™)

http://global.networldalliance.com/new/images/products/4259.png

4259/Data-Replay-Tool-DART

Request Information From Suppliers
Save time looking for suppliers. Complete this form to submit a Request for Information to our entire network of partners.