Is a credit card bill of rights nigh?
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Bob Moon: And as we just heard our consumer advocate mention, President Obama applied to the credit card companies so to speak. In part he was seeking some relief for the rest of us. He held discussions at the White House with executives from Visa, Mastercard and other banks that issue credit cards. Those folks have long opposed legislation known as the credit card holders’ bill of rights designed to limit charges that many consumers think are unfair. If you feel like weighing in on the issue, now might be the right time to demand some slack from your own members of Congress. In the past, banks have successfully defeated such bills in Congress. But as John Dimsdale reports, this year could be different.
John Dimsdale: Congressional Democrats have pushed stronger protections for credit card users ever since they took control of the House in 2006. This week, the House Financial Services Committee approved Congresswoman Carolyn Maloney’s credit card holders bill of rights for the second session in a row. Texas Republican Jeb Hensarling, who’s opposed the bill just as long as Maloney has pushed it, grudgingly praised the sponsor.
Jeb Hensarling: Although I disagree with her legislation, she has been quite tenacious in its advocacy. And I certainly yield to her on the point that the momentum is in her favor.
A day later, President Obama added to that momentum by telling credit card executives at a White House meeting, he wants limits on what he calls abusive and unfair practices.
Barack Obama: I trust that those in the industry who want to act responsibly will engage with us in a constructive fashion and that we’re going to be able to get this done in short order.
The Bush administration resisted efforts to impose restrictions on credit card policies. But candidate Obama campaigned on reform. Consumer advocate Gerri Detweiler at credit.com expects the President’s support to be a game changer.
Gerri Detweiler: We’ve got he atmosphere for change so I anticipate an even greater result from what’s going on right now in Congress.
Also fueling the momentum is the government’s trillion dollar bailout of the banking industry. Ben Woolsey at creditcards.com, says taxpayers figure all that money should have bought them some cheaper credit.
Ben Woolsey: Instead of that happening, they’ve been seeing rates increase and their credit lines go down. So there’s a real disconnect in the mind of the American consumer. I think that really has added quite a bit of ammunition to these legislative initiatives. I think they’ll definitely pass.
Even tho the Federal Reserve will impose similar rules by the middle of next year, reformers in Congress, and now the White House are pushing for earlier changes. The House is expected to pass a bill next week.
In Washington, I’m John Dimsdale for Marketplace Money.
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