⭐🔥 Click here to check Latest Celeb News & Celebrity Gossip in 2022! 🔥⭐
The Washington Independent
The Washington Independent

Democrats Push to Reel in Credit Cards

Gordon Dickerson
News
Last updated: Jul 31, 2020 | Feb 15, 2008

Image has not been found. URL: /wp-content/uploads/2008/09/creditcard3.jpgistockphoto

As Washington’s politicians and prognosticators haggle over the cause of the nation’s recent economic wilt, a group of House Democrats have proposed to reform an institution they claim has contributed to consumers’ burdens: the credit card industry.

That industry, these policymakers say, provides an invaluable service to consumers. But companies, they add, have also adopted a slew of dubious billing and marketing practices that target vulnerable populations, disguise fees and penalize cardholders even when they pay their bills on time. Hoping to give consumers more protections under their credit agreements, the lawmakers have crafted a handful of legislative proposals designed to rein the industry in.

Illustration by: Matt Mahurin
Illustration by: Matt Mahurin

“What good is a contract when one side doesn’t get to make any decisions?” asked Rep. Carolyn Maloney (D-N.Y.), who introduced legislation Feb. 7 that would reform the industry. Maloney’s bill, for example, would force companies to provide 45 days notice when they raise interest rates (currently no notice is required); it would force companies to mail bills at least 25 days before the payment is due (current law is 14 days), and it would cap over-the-limit fees at 3 percent (there is currently no cap).

Reps. Mark Udall (D-Col.), Keith Ellison (D-Minn.) and Lincoln Davis (D-Tenn.) are pushing similar proposals, all of which have the strong backing of consumer groups. Reform, Udall said, would not benefit only consumers. “It’s also important for the credit card industry,” Udall said, “for their legitimacy.”

Maloney, who heads the House financial institutions and consumer credit subcommittee, said that panel will take up the topic on March 13, probably melding the various strategies.

They have a tough road ahead. The nation’s financial institutions have rallied in opposition to credit card reform in the past, and are doing so again this year. In a Feb. 12 letter to every House member, industry lobbyist groups urged lawmakers to reject Maloney’s proposal.

Signed by the American Bankers Assn., the National Assn. of Manufacturers, and the U.S. Chamber of Commerce, among others, the letter contends the reforms would impose price controls and rate caps that infringe on private markets. Ultimately, the groups say, the changes would increase costs and reduce choices for consumers.

“These consequences, whether intended or unintended, would occur at a time when the economy can least afford to add new constraints to an already tightened credit market,” the groups wrote.

“A majority of consumers like the choices they have,” added Betty Riess, a spokeswoman for Bank of America.

That has done little to satisfy consumer advocates, who point to figures they say are evidence that change is long overdue. The Consumer Federation of America, for example, estimates that the accumulated credit card debt of all Americans totaled about $850 billion at the end of last year — roughly $7,500 per household. These debts tend to affect lower-income cardholders disproportionately, advocates say.

A 2006 Government Accountability Office report revealed another startling statistic: In 2005, GAO found, the nation’s six largest credit card company collected $7.4 billion in penalty fees alone.

“Too many credit cards are designed to trip up consumers and trap them in debt,” said Travis Plunkett, CFA’s legislative director.

College students are among the most vulnerable targets of credit card solicitations, according to Stephen Lerner, assistant to the president at the Service Employees International Union. Lerner said the average college graduate today carries $3,000 in credit card debts.

To battle that trend, SEIU has launched a Web site designed to catch the eye of young adults — KeepItInYourPants.org — which aims to educate students about the consequences of living in debt. The site lists statistics about the burdens of covering large debts, and offers advice about how to avoid it.

On Capitol Hill Thursday, Lerner’s mention of the site’s title reddened the faces of the assembled lawmakers — except for that of Maloney. “I’m going to your Web site,” she announced.

Gordon Dickerson | Gordon Dickerson is the founder of J.C.H, a one-person company that helps employers with resumes, cover letters, bios, LinkedIn profiles, and other employment-related documents. John also provides career coaching and advice on how to follow up on resumes, and he will also link clients with recruiters in their field. Gordon 's inherent passion for working with people and counseling them on their careers led him to extend his services to include career coaching, which he has been happily doing since 2008.

Related

$1.3 trillion in federal spending unaccounted for, report finds

Despite calls for independent bodies to keep government accountable, the Sunlight Foundation’s most recent Clearspending report has found the federal

$1.89 billion given to states to fight HIV

The federal government Monday announced more than $1.89 billion in funding to states to fight the HIV epidemic with access to care and with more cash for the failing AIDS Drug Assistance Program. According to an HHS press release , $813 million of that money will go directly to the ADAP programming. An additional $8,386,340 will be issued as a supplement to 36 states and territories currently facing a litany of unmet needs and access issues.

1 Brigade and 1 Battalion

ISTANBUL – It’s 10 p.m. in the lowest level of the Istanbul airport. In 20 minutes I’ll be allowed to board my plane to Kabul, bringing me to the

1. Brian Schweitzer

As governor of Montana, Schweitzer doesn’t represent one of the most highly populated, high-profile electoral states in the country. But this

#1 in Conspiracy Theories

Andrew Young’s tell-all biography of John Edwards, hitting shelves next week, is surging in one Amazon.com category in particular. #1 in Conspiracy

$1 Million for Toomey

Pat Toomey, the former Club for Growth president and leading Republican candidate in Pennsylvania’s 2010 Senate race, has announced a $1 million haul in the

$1 Trillion for Fannie and Freddie?

That is the worst-case scenario, according to Egan-Jones Ratings Co., quoted in a Bloomberg article making the rounds. The agency says that if home prices

$1.3 Million for Brown

The GOP’s candidate in the Massachusetts special election raised more than one million dollars -- double the goal -- in a 24-hour moneybomb on the Ron Paul

Ten Loopholes That Can’t Make It Into FinReg

Dan Pfeiffer, the White House communications director, wrote a blog post that lists the loopholes lobbyists most want inserted into Sen. Chris Dodd’s (D-Conn.)

Bachmann uncomfortable over earmarks ban

Republicans appear to have boxed themselves into a corner with their portrayal of earmarks as wasteful spending, as many of them have backed a moratorium on

Troubled mine holds hope for U.S. rare earth industry

China currently controls 97 percent of the world’s rare earth production. The Mountain Pass Mine could change that -- if it can overcome serious environmental concerns.

© Copyright 2022 The Washington Independent All Rights Reserved

Terms & Privacy | twi.news@washingtonindependent.com

⭐🔥 Click here to check Latest Celeb News & Celebrity Gossip in 2022! 🔥⭐