New Bill To Freeze Credit Card Rates
The Credit Card Accountability, Responsibility, and Disclosure Act (CARD), enacted in May 2009, prevents arbitrary interest rate, fee and finance charge increases on a customers existing balance. The credit CARD Act requires a 45 day notification of interest rate increases and also lengthens the due date that statements must be delivered, from 14 days to 21 days.
The credit card industry originally opposed the the credit CARD Act, but made it clear that they were capable of adapting to the new rules in the bill. Since May, lenders have selectively increased rates and imposed fees in preparation for the bill to take effect in February 2010.
Senator Chris Dodd (D-CT) has just introduced a new bill that will force companies to “immediately freeze rates on existing balances until the remaining provisions in the credit CARD Act go into effect in February”.
Senator Dodd introduced the first credit CARD Act bill to the Senate in 2004 and again in 2005 and 2008 before finally passing in May 2009 after the financial market had already begun it’s decline.
Those on the other side of the aisle who oppose this bill are saying now that that if Senator Dodd accomplishes his goal of getting this bill passed, it would severely restrict the flow of consumer credit which could further damage an already declining economy. This is the same old tired threat that is often used by those who feel it is better to have big business, regardless of the harm it will cause the average consumer, than to have companies adhere to a set of guidelines that prohibit them from taking advantage of our citizens.
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