An Overwhelming Response
Here's an update on the Federal Reserve's proposal to crackdown on "unfair and deceptive" credit card practices:
Yesterday was the deadline for submitting public comments about the proposal, which would ban such practices as arbitrarily raising interest rates, charging interest on debt that has been repaid and assessing late fees when consumers are not given a reasonable amount of time to make a payment.
The agency, which has proposed the new rules along with the Office of Thrift Supervision and the National Credit Union Administration, received almost 16,000 comments, and another 27,000 form letters that it is not posting on its Web site.
Most of the comments came from individuals, such as Ellis Collom, from Memphis, Tenn: "This needs to happen and happen quickly. The working people of this country need protection. There are to many forces against this and the board needs to step up and say enough is enough."
Others came from members of Congress and officials from the banking industry. Here are some excerpts:
From Sen. Carl Levin (D-Mich.), who has proposed his own bill for reforming the credit card industry: "Stronger consumer protections and clearer prohibitions against unfair and deceptive credit card lending practices are long overdue. The credit card industry today is rife with unfair, deceptive, and predatory practices. The proposed rule would put an end to some of these abusive practices. Unless expanded, however, the proposed rule would leave untouched some of the most blatantly unfair credit card practices in existence today."
From Chase Card Services: "The UDAP [Unfair and Deceptive Acts or Practices] Proposal is very broad, directly impacts significant aspects of Chase's credit card business and, if finalized as proposed, is likely to have profound effects on Chase's operations and financial results. We have substantial concern that these effects will ultimately work to the detriment of its consumers."
And from the American Bankers Association: "ABA believes that the Board, the OTS and the NCUA should proceed cautiously in establishing unfairness rules under their UDAP rule-making authority. UDAP situations are often characterized by case specific facts that defy industry-wide generalization. In exercising their FTCA Section 18(f)(1) rule-making authority, the agencies must be mindful to apply standards that properly consider the unique attributes of the banking sector and take extra care in performing their analysis because it will have precedent setting application far beyond the particular practices at issue."
The Fed hopes to finalize regulations by the end of the year.
Note to Readers: Starting at noon today, washingtonpost.com is turning off comments on this blog to allow for some software upgrades and other maintenance. Blog entries and comments are expected to resume by Wednesday afternoon.
Please email us to report offensive comments.
Posted by: G.L | August 6, 2008 3:44 PM
Posted by: george | August 8, 2008 7:50 AM
Posted by: N | August 8, 2008 10:17 AM
The comments to this entry are closed.