rssPush to Expedite Credit Card Reforms Gains Momentum
Thursday, October 22, 2009 at 11:55 am
- 4 Comments
Democrats on Capitol Hill were all cheers when they passed first-of-its-kind credit card reform earlier in the year — only to become publicly indignant when the card companies began hiking rates and fees in advance of those changes taking hold.
So after some Democrats initially delayed the implementation date until next year — a naked bow to the banking industry — others are now trying to change the implementation timeline so the reforms take effect sooner.
Indeed, the House Financial Services today is marking up legislation to do just that. The bill, sponsored by Reps. Carolyn Maloney (D-N.Y.) and Barney Frank (D-Mass.), would expedite the reforms so that they kick in Dec. 1 — 12 weeks earlier, for most provisions, than the existing law.
Boosting the effort, Sen. Mark Udall (D-Colo.) today introduced an identical proposal in the upper chamber.
Outside of the legislative effort, Democrats have been urging the Federal Reserve, which is responsible for implementing the legislation, to expedite the reforms on its own. But Fed Chairman Ben Bernanke told lawmakers this week that, while the quicker start date “could provide benefits for consumers, the [Fed] continues to believe that, given the breadth of the changes required by the [law], card issuers must be afforded sufficient time for implementation to allow for an orderly transition.”
In a letter to Rep. Spencer Bachus (Ala.), senior Republican on the Financial Services Committee, Bernanke also claimed that expediting the reforms unilaterally would steal an opportunity from the public and the card companies to comment on the change.
That response riled Sen. Charles Schumer (D-N.Y.), who said this week that if the Fed doesn’t make the changes, “we should quickly pass legislation in both the House and Senate to do so.”
Stay tuned…
4 Comments
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Comment posted October 23, 2009 @ 4:23 am
Just when I think that the shameless acts of greed can’t get worse the latter day robber barons send in their puppets to act out a shame debate. If the lawmakers actually wanted to protect the public from evil predatory tactics they could have done so with a simple act to temporarily stop the naked consumer abuse and engaged in an honest search for truth and fairness. Sadly it seems that truth and fairness is no longer the gold standard of how to treat each other. It seems that greed and deception is the new morality. Obviously the credit card industry will get (BUY) their way and with a little effort they can and will damage or destroy a few hundred thousand more lives before February 2010. My opinion does end on a pleasant thought though. This kind of human vermin does have a special place in hell waiting for them. With a little luck they might even get to ask Ken Lay how much pleasure did his blood money provide.
Comment posted October 23, 2009 @ 11:26 am
The average interchange fee in the U.S. is seven times the interchange fee set by Visa and MasterCard in countries throughout the rest of the world. Using 2008 figures, if the interchange fee charged by credit card issuers was decreased (via comprehensive credit card reform legislation) from the current 2.10% to 0.60%, the result would be an annual savings of approximately $34.3 billion for U.S. merchants and consumers. Credit card issuers could retain 0.3% as a processing fee, the remaining 0.3% could be a “tax” used to fund a Natural Disaster Trust Fund (NDTF). In 2008, this would have generated $6.86 billion in funding for a NDTF.
Let's be clear. The interchange fee is a hidden tax, just not a tax subject to political control or for which there is any discernible social benefit. Decreasing, and imposing a transparent tax on, the interchange fee would have the same stimulus effect of a tax break, but without an impact on the federal budget.
The following article discusses how comprehensive, standardized, simplified, and transparent credit card reform legislation may fund a Natural Disaster Trust Fund.
http://www.givemebackmycredit.com/blog/2009/10/…
Comment posted October 26, 2009 @ 7:07 pm
Too much government control. We are turning the US into a nanny state. If people are careless enough to charge without reading the fine print, then they deserve to get into trouble. Why make it easier for misusers of credit to charge more at lower rates? They will still have trouble repaying the money redgardless.
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