Find the best credit card offers online.Attorney General Richard Blumenthal and U.S. Senator Chris Dodd both urge that consumers who pay credit card obligations on time should be exempted from rate hikes.
Effective February 22 this year, the CARD Act, or Credit Card Accountability Responsibility and Disclosure Act, will prevent credit card institutions from raising rates on existing balances of their clients.
However, since last January, some credit companies raised their interest rates and fees on existing balances, some by as much as 30%. The Attorney General reported that even consumers with good credit records were not spared.
Blumenthal is intent on protecting these “good” creditors. He urged U.S. Federal Reserve Chairman Ben S. Bernanke, to take a lead role in initiating a roll-back of fee increases, as early as next month, back to the levels in last January.
In a letter to Blumenthal last December from the American Bankers Association, the association said that member banks are making an effort to compensate for financial losses. They resorted to increasing interest rates and fees on all their credit clients, including those who have good credit records.
The Attorney General said that banks should instead be looking for ways to help customers recover from losses.
In support, Senator Dodd expressed delight that the Attorney General is correct in pointing out flaws in the credit system, which he describes as “outrageous” and “they need to be stopped.”
The Senator, in a statement, said: “Over the last number of months, I’ve tried time and again to stop credit card companies from abusing their customers with outrageous rate hikes. I’m glad to have Attorney General Blumenthal with me in this fight. Consumers need all the help they can get.”
As author of the CARD Act, the Senator said that his initiative suffered a setback in November as Republicans blocked a bill he authored which attempted to freeze rates imposed by credit card companies and banks. Moreover, he also said that the Fed has not done anything since then to support the initiative.
The CARD act gives Bernanke authority to impose rules to pave the way for full implementation of this new legislation. Blumenthal clarified that roll-backs will be an essential requirement in the February implementation.
According to the act, it will not be until August that the first bank reviews would commence. After reviews, the banks are expected to begin roll-backs specifically for the benefit of those credit clients who have not exhibited any “adverse conduct.”
Blumenthal explained that rate increases would be deterred by February if the Fed Chairman “puts the banks on notice that the rates would be rolled back.”
