Fed’s Consumer Advisory Council Warned of Doomsday Scenario
Here’s an interesting look at the inner workings of the Consumer Advisory Council, which is supposed to advise the Federal Reserve on consumer protection issues, including the Credit Card Reform Act. Page 35 of this link (pdf), from public transcripts of the council’s October 2009 meeting, shows the former chair of the and a banker predicting a “doomsday” scenario once the legislation — which curbs high rates and excessive fees — actually takes effect:
Edna Sawady, CAC chairwoman: Last month, the Board issued a proposed rule to implement the provisions of the Credit Card Act that go into effect on February 22, 2010. I’m sure you will get a kick out of the date, because you’ll hear a lot of discussion of what’s going to happen on February 22, 2010. I’ll just give you a sneak preview — don’t go to the grocery store.
Kevin Rhein, Wells Fargo executive: Or buy gas or anything else.
Hmm. The new regulations became law Feb. 22. I didn’t see long lines at gas stations and grocery stores as consumers found their credit cards being denied. Did you?
Keep in mind, this is an organization created to help give guidance to the Fed on consumer protection.
See more for yourself, as the Fed posts public transcripts of all the meetings on its website.