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| Congressman Teague Urges Credit Card Companies to Cease Unfair Rate Hikes |
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Washington, DC — Wednesday, Congressman Harry Teague joined 18 of his colleagues in the House in sending a letter to the country’s major credit card companies, calling on them to pledge to not change the terms on consumer credit card accounts ahead of federal credit card reform legislation slated to go into effect early next year.
"Families across southern New Mexico are struggling to make ends meet as it is without credit card companies drastically increasing their interest rates before the Credit CARD Act goes in to effect,” said Congressman Harry Teague. "Rather than taking the time to responsibly implement the provisions required by February 2010, credit card companies are taking advantage of both their customers and the intention of our legislation. We can no longer allow America’s credit card companies free reign – today, my colleagues and I join together to call on these companies to halt their unfair interest rate hikes.”
The Credit Card Accountability, Responsibility and Disclosure Act of 2009 (Credit CARD Act) is a tough new consumer protection law that provides American consumers with increased protections against unfair, deceptive, and anti-competitive credit card practices. The Credit CARD Act was signed into law by the President on May 22nd, 2009. It is slated to go into effect in February of 2010.
The full text of the letter, which was also sent to the Chief Executive Officers of JPMorgan Chase & Co, American Express Co, Capital One Financial Corp, and Discover Financial Services is below:
October 7, 2009
Vikram Pandit Citigroup Chief Executive Officer 399 Park Avenue New York, NY 10022
Dear Mr. Pandit,
We have received an increasing number of complaints from our constituents regarding practices in the credit card industry unreasonably raising rates in advance of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act) reforms. As you know this critical legislation was signed into law by President Obama several months ago.
Many of these unreasonable increases would be prohibited under the Credit CARD Act. The implementation of these necessary reforms should not be taken as an indication that the industry should take advantage of consumers now before the prohibitions come into effect. According to a report by The Pew Charitable Trust, interest rates for cardholders have increased an average of 20% this year from issuers who are rapidly changing account agreements, revoking promotional rates, and imposing interest rate increases on existing balances, including those less than 30 days past due. Such actions violate the notions of fair play and create an economic burden on our constituents, many of whom are struggling to make ends meet.
What makes this situation particularly troubling is the fact that the effective date for the majority of the provisions in this legislation was set for February of 2010 to give credit card companies time to implement the new federal regulations – not additional time to violate the spirit of the law by changing the terms of agreements, including raising interest rates on consumers.
In response to such actions, Representative Carolyn Maloney and Chairman Barney Frank have suggested that quicker implementation of The Credit Card Act is necessary. Representative Maloney has introduced H.R. 3639, which has been referred to the House Committee on Financial Services.
Yesterday, Bank of America announced that due to concerns from their customers, they would not implement any changes to customer agreements that would re-price consumer credit card accounts. Bank of America’s actions are a good first step; now the rest of the industry should follow their example.
We urge you to immediately reconsider your practices regarding raising credit card rates prior to the full implementation of the Credit CARD Act. We encourage you to follow the appropriate and responsible example set forth by Bank of America.
Sincerely,
Betsy Markey Member of Congress
Dina Titus Member of Congress
Ed Perlmutter Member of Congress
John Salazar Member of Congress
Shelley Berkley Member of Congress
Mary Jo Kilroy Member of Congress
Steve Driehaus Member of Congress
Harry Teague Member of Congress
John Adler Member of Congress
Suzanne Kosmas Member of Congress
Ben Ray Luján Member of Congress
Marcia Fudge Member of Congress
Neil Abercrombie Member of Congress
Martin Heinrich Member of Congress
Henry Cuellar Member of Congress
David Wu Member of Congress
John Boccieri Member of Congress
Phil Hare Member of Congress
CC: JPMorgan Chase & Co American Express Co Capital One Financial Corp Discover Financial Services
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