The hearings on “Improving Credit Card Consumer Protection: Recent Industry and Regulatory Initiatives” (watch and read transcripts here) in the House of Reps continues the recent trend of Congressional credit-industry criticism. You will notice only two witnesses representing consumer interests were invited: Kathleen Keest of the Center for Responsible Lending and Ed Mierzwinski of U.S. PIRG. The rest were industry insiders or friends of the industry.
James Huizinga, attorney and advisor on credit card programs, for example, stated, regarding current regulations, “I do not believe it is appropriate to change course.”
However, on the table are changes to “Regulation Z,” which governs many credit card transactions, proposed by Democrats. The proposed changes include a requirement that credit cards notify consumers 45 days before changing terms (rather than the current, near-instantaneous practice).
The credit card representatives apparently did face some tough questioning on credit card companies’ abusive, deceptive, and predatory practices. Will things change? Let’s hope so. It seems clear that the credit card industry cannot be trusted to police itself. A bit more regulation to ensure fairness might not be a bad thing.
[via CL&P Blog]
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Sam, as someone who has been working with http://www.unfaircreditcardfees.com I share your view that the industry cannot police itself and a nudge, either from increased regulation or the possibility of regulation, is needed to reign in the credit card companies’ abusive, deceptive, and predatory practices. Our favorite fee is interchange, the hidden fee the card companies and their member banks collect on every credit and debit card purchase. Interchange costs consumers $36 billion last year, about $300 for the average American family. Additionally, even if you’re paying with cash you bear the cost of interchange in the form of higher priced goods.
At the very least, Consumers and merchants deserve full transparency from the credit card companies and I hope continued Congressional oversight will ensure this happens.