Congress Steps Up and Tackles Credit Card Reform
This past Thursday was the fourth time in the past year that House of Representative lawmakers discussed the Credit Cardholders’ Bill of Rights, unveiled earlier this year by Rep. Carolyn Maloney, D-N.Y. More than half of the 15 witnesses that testified before a panel of the House Financial Services committee endorsed the 9-point legislative plan. The issue has taken on more relevance as more and more Americans are facing rises in unemployment, inflation and have had to increase their reliance on their credit cards to make ends meet.
A statistic from the CNN article, Congress Tackles Credit Card Reform:
Based on the most recent data from the Federal Reserve, the average American family carries an average of $2,200 in credit card debt.
As fallout from the recent housing and credit crises hit the big companies, more everyday folks are now feeling the affects as the companies, in order to preserve their profits, are passing the whole of the costs onto the consumers. This is the point many credit card company critics have argued. Many credit card issuers have been charged with engaging in “unfair” practices such as raising interest rates on debt even when consumers pay on time or imposing excessive fees.
On the flip side, credit card issuers have said that such laws as the Credit Cardholders’ Bill of Rights would have bad consequences on all consumers by making credit more expensive and less easily available.
Apart from Maloney’s Credit Cardholders’ Bill of Rights, a number of new legislative proposals are currently floating around Congress. Senator Carl Levin, D-MI and Senator Robert Menendez, D-NJ, have proposed new legislation aimed at reforming the industry.
Lawmakers were captivated by the credit card horror stories presented by three individuals Thursday, including that of Susan Wones, a Denver woman who said the rates on her multiple credit cards spiraled higher even though she stayed below her credit limit.
“I don’t believe that is fair for me to pay my bills on time and live by the rules of the contract and still be penalized,” said Wones. “This system must be reformed so that customers like me are treated fairly and equitably.”
Although we are a long way from real changes within the industry, I am very hopeful now that Congress is acting on this. As many middle class Americans are finding themselves in ever-growing holes of debt, credit card companies should shoulder most of the blame for helping to put them there. After all, the saying goes, “For the people, by the people” not “For the profit, forget the people.”
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