“To the dismay of Ohio Treasurer Richard Cordray and Americans everywhere, the Federal Reserve Board has yet to issue new regulations to put an end to the deceitful practices of credit card issuers. While acting quickly and surely to bail out the nation’s failed financial system in September, the Federal Reserve has spent nearly six months deliberating its much-anticipated credit card reform policies.””
To the dismay of Ohio Treasurer Richard Cordray and Americans everywhere, the Federal Reserve Board has yet to issue new regulations to put an end to the deceitful practices of credit card issuers.
While acting quickly and surely to bail out the nation’s failed financial system in September, the Federal Reserve has spent nearly six months deliberating its much-anticipated credit card reform policies.
The Fed’s May 1 timetable included a 60 day window in which Americans could send comments pertaining to questionable credit card practices. Treasurer Cordray immediately took a pro-active stance.
This so-called ‘gotcha capitalism’ is hitting families where it hurts, he said in May. It ruins credit scores. It adds thousands of dollars a year to a family’s expenses. It produces no benefit to the economy or society. It’s greedy and should end.
Cordray received over 5,300 comments from Ohioans to add to the nationwide total of 56,000, the most ever for a Fed proposal. In addition to Cordray’s efforts, 60 city councils and county authorities representing 4.7 million Ohioans signed resolutions demanding change.
Despite the media’s coverage of the effort and the public’s renewed interest in the failing economy, many Americans still do not fully understand the issue.
In the past few years, banks have bombarded students with aesthetically appealing low-interest credit card offers, and many young people have taken the bait.
Unfair and immoral practices by credit card companies can ruin credit scores and cost cardholders thousands of dollars per year.
Examples of these unethical practices include unfair timetables for payments, raising APRs of outstanding balances and unfair fees for exceeding the credit limit because of an illegitimate hold or block placed on an account.
For example, most gas stations place a hold on a credit or debit card’s funds when pumping, until the exact amount owed is known. Sometimes a technical glitch causes the hold to remain on the account for up to a week. New regulations would prevent such an unfortunate situation from destroying the cardholder’s credit score and wallet.
Also, credit card companies’ unethical balance computation and deceptive firm offers of credit are now on the chopping block of the Federal Reserve.
The comment period ended on Aug. 4, but the Federal Reserve has yet to even construct a timetable for the creation of its new guidelines.
This is absolutely unacceptable, Cordray responded on Wednesday. The federal government acts quickly on multi-billion dollar decisions to deal with the mess made on Wall Street. But it takes weeks, months, and even years to bring relief to the people living in our neighborhoods… relief is needed today.
All 56,000 comments have been posted on the Federal Reserve’s Web site for the public to see.
An example comes from Tabb Schreder, of Toledo, wrote that he has read countless stories about how people have been taken advantage of by credit card companies because they did not take the time to read the pages and pages of rules… Credit card companies have enjoyed preferential treatment for far too long. I encourage you to support the bill calling for credit card reform.