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As the credit card business boomed in recent years, too many lenders added tricks and traps that have ensnared and infuriated millions of their customers. Interest rates spike even when a consumer meticulously pays on time. Fees appear out of nowhere; banks can change their complicated rules at any time or for any reason.
Responding to thousands of complaints, the Federal Reserve Board issued new rules last December to help curb unfair and deceptive practices. But those protections will not take effect until July of next year. [July 2010!..ed.] Congress now has an opportunity to move far more swiftly.
Senator Christopher Dodd, a Democrat from Connecticut and chairman of the Senate banking committee, has offered a credit card bill that deserves the support of his colleagues. It is stronger than the Fed’s regulations and would provide consumers relief more quickly than the credit card bill now moving through the House.
The Dodd bill would help end “bait and switch” tactics like promising a very low interest rate then adding hidden fees and other charges. It would make credit card contracts, which tend to favor the banks, less one-sided. It would help protect younger customers who are more easily tricked into burdensome debt.
And it would provide stronger protection against abusive practices — charging very high fees, for instance, for minor mistakes like being hours late paying the bill. ...
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