Schumer: The Banks’ Computer Literacy Ain’t a One-Way Street
It’s all credit cards, all day long. And Sen. Charles Schumer (D-N.Y.), a member of the Senate Banking Committee went on MSNBC, this afternoon to reiterate his earlier call for the Federal Reserve to prevent credit card companies from hiking rates on existing balances — something Congress is now largely conceding it can’t do with any urgency in the current political environment.
The Fed has finalized rules that would do just that, but they don’t go into effect until July of 2010.
Many Democrats and consumer advocates would like to see that timeline shortened, if only to help consumers struggling in the middle of a beaten economy. The banks, however, insist that they can’t possibly rejigger their computer programs to conform to the change before the 2010 deadline. Of course, the complexity of those computer systems hasn’t stopped many card issuers from scrambling to raise the controversial rates before the prohibition kicks in — a discrepancy that hasn’t been lost on Schumer, who isn’t buying the idea that Fed’s deadline is burdensome enough.
“They don’t need 18 months,” Schumer said. “They readjust their computers for other things much more quickly than that.”
President Obama hosted executives from the largest card issuers at the White House this afternoon in an effort to get them on board with some of the Democrats’ reform plans. Meanwhile, the card companies continue to hike their rates and fees — often unannounced — and consumer advocates wonder when Washington policymakers will intervene. Linda Sherry, director of national priorities for Consumer Action, an advocacy group, said this afternoon that consumers “are being seriously hurt while we sit here and twiddle our thumbs until 2010.”
“[Congress] thought these companies would hold off with these bad practices in the interim,” Sherry added. “The exact opposite is happening.”