Needed: Local commitment to national credit card reform

Written by Dory Rand on July 30, 2008 - 2:00am

What kind of contract can be changed at any time for any
reason by one party often to the detriment of the other?  Credit card contracts, but hopefully not for
much longer.

Now is the time to level the playing field between credit issuers and credit card borrowers and curtail the industry’s worst abuses.  In Congress, members from both sides of the aisle have co-sponsored a bill to do just this––including Illinois Representative Luis Gutierrez of the House Financial Services Committee.

Bait and switch clauses, double-cycle billing, and cut-off times designed to rack up late fees––these are the practices that a recent survey showed as many as 90 percent of consumers found unfair.

In fact, when the Federal Reserve Board considered adopting rules to prohibit many of these practices, over 12,000 consumers took the time to sound off in favor of strong consumer protections.

Credit card delinquencies have reached their highest level since 1993.  One in five households is expected to use their credit card to pay at least a portion of their heating bill.  While these figures suggest a sense of urgency, many in Congress prefer a different route.  Rather than pass protections that have seen over two years of public comment and deliberations, they have voiced support for drawing out the process even longer.

This legislation would not cap interest rates, cut off credit options, or ban products.  Rather, it sets out basic ground rules for a fair transaction, and ensures an equal exchange of information between the borrower and lender.   

Credit card borrowers in the Chicago region are subject to the same abuses as borrowers all over the country and deserve protection from unfair and deceptive practices that can trip up borrowers even after the most thorough reading of the fine print.  We respectfully request that the remaining House Financial Services Committee members from the Chicago region––Representatives Melissa Bean, Judy Biggert, and Peter Roskam––lend their support to this national effort and support HR 5244 as written.