Credit Card Companies Continue to Bilk Customers; Government Helpless
Recent media reports that Citigroup had discovered a potential way around regulations forbidding it from abusive rate hikes sparked more than a public outcry; it convinced Citi’s competitors to follow suit. Since the regulations are set to take effect Monday, card companies are scrambling to inform customers about the changes to their credit card agreements in order to keep bilking them in exactly the way the law was designed to prevent.
Congressional oversight committee chairwoman Elizabeth Warren told reporters today that the government’s hands are tied without the consumer protection agency for which Sen. Chris Dodd (D-Conn.) has sought a Republican backer, to no avail.
“[The Credit Card Accountability, Responsibility, and Disclosure Act] is a good first step but it isn’t enough alone,” said Warren on a conference call with reporters hosted by the U.S. Public Interest Research Group. “The credit card industry and the entire consumer credit industry is broken. We need an agency, a cop on the beat that is flexible and responsive.”
Unfortunately, too many senators seemingly disagree with her.
Ed Mierzwinski of the U.S. Public Interest Research Group does not. He thinks the fact that the Fed refused to take tough action against credit card companies’ regulatory evasions last year indicates they don’t have consumers’ best interests at heart and never will.
“The Fed could have had a broader anti-evasion provisions as well, which we all asked for in our comments and didn’t get,” said Mierzwinski. “The Fed gave us obvious protections against a couple of provisions but they should have given us a big hammer and they didn’t.”
But with the folks at the Fed seemingly set to cede some authority to the Treasury Department over banks as part of the larger financial oversight council, don’t bet on them agreeing to give authority to a new agency just because some people think consumers deserve protection. That’s not their job, and they prefer that it not be anyone else’s, either.