Political ad misrepresents legislation
A group called American Rights at Work (ARW) is running television spots in Nevada supporting Harry Reid. The spots say Reid “led the fight” for legislation “cracking down on surprise interest rate hikes” by credit card companies.
But that’s not quite the case, as Nevadans learned last week when Citibank notices of interest rate hikes arrived.
The bill Reid supported, H.R. 627 (“Credit Card Accountability Responsibility and Disclosure Act of 2009”), actually gave the credit card companies another nine months to do their worst. It was signed by President Obama on May 22 but does not take effect until Feb. 22, 2010. As a result, the card companies have been running amuck, so much so that members of Congress have been begging them to stop while acting betrayed.
“It was argued … that they needed more time, and we granted them more time, but it was under the understanding that abusive practices would not continue, and double and increase dramatically,” said Rep. Carolyn Maloney, the bill’s sponsor.
Consumer advocates say it would have been better if Congress had done nothing at all, because the bill’s passage unleashed an array of abuses, such as the Citibank hikes of already sky-high rates.
“It seems that each new day brings an additional unintended negative consequence of the CARD Act,” wrote Curtis Arnold at CardRatings.com. “It seems you can’t pick up a newspaper these days without hearing something negative about the card industry. While you certainly can’t blame every rate and fee hike on the CARD Act and there are positive aspects of the law, there is no doubt that the response to the law by card issuers has been overwhelmingly negative for consumers.”
What advocates describe as a more consumer-friendly version of the law (H.R. 5244), also sponsored by Maloney, was passed by the House in 2008 but it was never voted on in the Senate.
American Rights at Work, the group running the Reid ad, is a nonprofit group that supports workers rights issues. It’s headed by David Bonier, former assistant Democratic leader in the U.S. House of Representatives.