The credit card bill signing into law was greeted with widespread support from consumers and consumer advocates. Many believed that the law would finally bring to close the era of predatory lending and other unfair practices from credit companies. However, many soon realized that a fundamental flaw in the bill would cost credit card holders even more: the nine month window before the credit card bill becomes active.
While the credit card bill was signed last May, full activation of the bill would not begin until February of next year. The nine month reprieve for credit card companies was meant to give them enough time to change their business machineries to adapt to the new credit card legislations. Unfortunately, credit card companies soon made the nine month leeway a nine month open season to profiting as much as they can from credit card holders and establishing harsh and oppressive credit card rates and fees meant to ensure continued profitability for them when the credit card bill becomes active.
Now consumers are finding themselves in even more trouble than they were before the credit card bill became law. Interest rates are increasing almost by the week, the situation with fees are just as bad and credit companies are introducing even more fees added on to existing ones and available credit is being cut down as fast as credit card holders can pay off their debts. An even more ominous move by credit companies is moving their fixed rate credit cards to a variable rate. This will ensure that, even when the credit card bill is in place, the card holder's interest rate will still fluctuate without any prior notice.
These happenings have alarmed many financial watchers, not the least of which is Senator Christopher Dodd. Chairman of the Senate Banking Committee, the senator was a supporter of the credit card bill when it was in debate at the Senate. Now, with the bill still inactive and credit companies taking advantage of their nine month leeway, he recently issued a request for an increase in government monitoring of the credit industry, writing a letter to the heads of the FDIC, the Office of Thrift supervision, the National Credit Union Administration, the comptroller of the currency and the Fed.
The senator is pushing for government regulators to move on to enforcing some of the laws in the credit card bill, given the current developments in the credit industry. His worry over the situation is quite valid as recent reports have shown that credit card companies are engaging in severely opportunistic and oppressive practices and are relatively unchallenged, being the ones charged with reviewing their own policies.