Shining a Light on Card Fees
Changes Proposed For Long-Neglected Industry Issue
By Carrie Johnson
http://www.washingtonpost.com/wp-dyn/content/article/2007/12/01/AR2007120100161.html?hpid=topnewsSenior Democrats on Capitol Hill want to ban excessive credit card fees. Bank regulators are on the verge of forcing companies to give more notice before raising interest rates. And New York's attorney general, whose investigations transformed the student loan industry, now has his eye on conflicts of interest in the credit card sector.
After years of complaints about abusive practices that trap borrowers in an endless debt cycle, federal and state officials are shining light on the most controversial practices and preparing changes that would make card companies' policies more consumer-friendly.
The fight between consumer advocates and the banks that issue credit cards has been simmering for decades. But a rise in cardholder complaints and the ascension of Democrats in the House and Senate is pushing companies to engage in preemptive damage control and is setting the stage for what could be the most significant changes to the industry in more than two decades.
Sen. Carl M. Levin (D-Mich.) said he will hold a hearing this week focused on card companies that raise interest rates for consumers who comply with the terms of their original agreement. "It is becoming increasingly difficult for the credit card industry to defend this type of unfair interest rate increase," he said.
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