Business as usual
Harry Reid’s reelection campaign has touted the passage by Congress of the Credit Card Accountability Responsibility and Disclosure Act of 2009, also known as the CCARD Act, as protecting consumers against predatory bank practices. The recently enacted financial regulatory measure also contains language creating a Consumer Financial Protection Bureau with authority over credit cards, payday lenders and other fields that have often posed risks for consumers.
In his July 8 appearance for Reid in Las Vegas, President Obama said, “We don’t want them overcharging people on their credit cards for hidden fees. So Harry and I and a bunch of people just tried to put together a sensible bit of reform.”
But a report by Pew Charitable Trusts finds Citibank, Chase, Discover and other companies going around the protections in CCARD and finding other ways to dig more money out of consumers. The median annual fee on bank credit cards jumped 18 percent from July 2009 to March 2010. Credit unions annual fees went up 67 percent. Median cash-advance and balance-transfer fees jumped 33 percent.
The Pew report, Two Steps Forward, credited the new law with progress but also said there is less transparency in some areas: “A troubling new trend emerged: some disclosures stopped including the size of penalty interest rates even as issuers reserved the right to impose them. Other issuers failed to state what cardholder actions would trigger penalty rate increases or how cardholders could return to non-penalty rates.”
The report can be read at www.pewtrusts.org/our_work_report_detail.aspx?id=60075