Creditnet News Story
Two senators pushing Fed for greater consumer protection
Tuesday, July 20, 2010
By Sam Lee
While the Federal Reserve will begin enforcing new measures designed to protect consumers from costly fees on their late credit card payments, there are two U.S. senators who believe the rules don't go far enough.
According to the Associated Press, Senators Charles Schumer of New York and Tom Harkin of Iowa sent a letter to Federal Reserve Chairman Ben Bernanke, telling him that "credit card companies can still double or triple the interest rate when a consumer falls two months behind on payments."
The AP's report said that the new credit card rules, which take effect on August 22, do not currently prevent rate hikes of this kind. Schumer and Harkin are threatening that they will seek legislation to compel the Fed to act on these requests if it does not do so of its own volition.
As they are currently written, the Fed's rules only require banks to give customers several weeks' advance notice of rate hikes in the event of across-the-board changes. It does not require the same notice for penalty rates.
