Washington – In response to today’s release of a final rule by the
Federal Reserve (Fed), Office of Thrift Supervision (OTS) and the
National Credit Union Administration (NCUA) to ban certain unfair or
deceptive acts and practices related to credit cards, Congresswoman
Carolyn Maloney (D-NY), author of the Credit Cardholders’ Bill of
Rights (H.R. 5244) and Chair of the House Financial Services
Subcommittee on Financial Institutions and Consumer Credit released the
following statement:
“As one who’s been working for years to
bring consumers the protections they need, I’m delighted to see the
regulators take substantive action. Finally, these practices have been
declared what they are: ‘unfair’ and ‘deceptive.' But while these new
rules are a strong first step, I’ll be working with my Subcommittee and
Chairman Frank to fill any gaps in protections for cardholders. These
new rules aren’t scheduled to take effect until 2010; Congress should
act sooner to protect American consumers by giving credit card
protections the permanence and force of law,” Maloney said.
“Credit cards are an important financial tool and are a vital part of our economy, but we must allow consumers to make informed decisions regarding interest rates and fees related to their credit cards, and allow competition to drive the credit card markets,” Maloney continued.
“I agree with President-elect Obama, who repeatedly campaigned on this issue by saying ‘…Americans aren't falling into debt because they made an irresponsible decision; they're falling into debt because credit card companies are pushing them over the edge. For too long, credit card companies have been using unfair and deceptive practices to trick Americans into signing agreements they can't afford.’,” Maloney said.
“I’ll be introducing a new Credit Cardholders’ Bill of Rights in the House in the first days of the 111th Congress, along with Sen. Mark Udall (D-CO) in the Senate, who was a vigorous advocate of my bill in the House this session. With the regulators finally acting, and the new Administration’s support, Washington should do more for Main Street,” Maloney concluded.
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Background: H.R. 5244, written by Rep. Carolyn Maloney after a series of roundtables with industry and consumer stakeholders and six public hearings, had 155 bipartisan cosponsors. It passed the House Financial Services Committee with all Democrats supporting. It passed the House on September 23, 2008 on a vote of 312-112; the majority coalition included the support of 81 Republicans. It was not brought to a vote in the Senate. The Credit Cardholders’ Bill of Rights goes further than the new rules promulgated by the Fed, OTS and NCUA by:
• Empowering cardholders to set their own limits on their credit
• Prohibiting the marketing of cards to minors
• Allowing consumers to reject a card before activation without harming their FICO score
• Requiring issuers to provide more data to allow better regulatory oversight of the industry
Sen. Barack Obama, June 11, 2008:
"...Part of why our debt crisis is so bad is that some folks are making reckless decisions -- racking up big credit card bills by purchasing flat-screen TVs and other luxury goods that they know they can't afford. And they should have to face the consequences of those decisions.
But many more Americans aren't falling into debt because they made an irresponsible decision; they're falling into debt because credit card companies are pushing them over the edge. For too long, credit card companies have been using unfair and deceptive practices to trick Americans into signing agreements they can't afford. The contracts you sign when you get a card have gone from being one page-long a few decades ago to more than thirty pages-long today. And they're often filled with traps and fine print that only a credit card executive could understand. These companies have been crossing the line to boost their bottom line.
But rather than stop this outrage, Washington has let them get away with it…"
For more information please visit Rep. Maloney’s Credit Cardholders’ Bill of Rights web page
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