The New York Times published an editorial damning Congress’ unwillingness to protect consumers from a rising tide of unreasonable fees and penalties that have boosted the financial sector’s bottom line, while impoverishing millions of Americans.
The Times’ preferred solution to problems like universal default and the double-cycle billing is the Stop Unfair Practices in Credit Cards Act of 2007, S. 1395, a bill that has languished in the Senate Banking committee since its introduction in May by Senator Carl Levin (D-MI.) Neither Senator Levin, nor the bill’s four cosponsors are members of the Banking committee.
Senator Levin’s bill would be a boon to consumers if passed. Penalty interest rates would be capped at 7%, retroactive rate increases would be banned, along with double-cycle billing, and credit card companies would be prohibited from charging consumers for paying their bill.
The Times realizes that Levin’s bill is only a “good start,” and calls on Congress to “ban deceptive card offers outright, strengthen federal oversight and toughen truth-in-lending laws.” We agree that action is needed, but why not place the blame where blame is due?
Congress is capable of righting our ailing system, but so is the Administration. The Office of the Comptroller of the Currency is charged with ensuring the financial health of the nations banking system, and has broad regulatory powers that allow the Comptroller to influence billing procedures and interest rates. Instead, the Comptroller is a puppet of the banking system, putting the needs of financiers ahead of the needs of the people.
The Times is absolutely correct for highlighting the government’s failure to protect American consumers, but the blame should be evenly distributed.
Credit Card Buyer Beware [NYT]
S.1395 – Stop Unfair Practices in Credit Cards Act of 2007 [THOMAS]
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