U.S. Federal Watchdog Agency Begins Monitoring Credit Card Companies
At the annual Society of American Business Editors and Writers held this week in Indianapolis, Indiana, the head of the newly-commissioned Consumer Financial Protection Bureau sent a strong message to the credit card issuers in the audience: we are watching you.
Nearly two years after the agency and many of the Obama administration’s rules went into effect, the CFPB has a leader, Richard Cordray, who previously served as Attorney General of the state of Ohio and has a noted history with taking on financial malfeasance.
It was as Attorney General that Cordray led his state in the “Speak Up Ohio” project to give citizens the ability to share their thoughts with the government and the Federal Reserve on the proposed piece of legislation that would become known as the CARD Act. Roughly 1/3 of all national input on the CARD Act came from Ohio.
In the CARD Act, specific guidelines and restrictions were laid out to better protect consumers from negligent and unfair practices conducted by credit card companies. Some of the pieces of reform include protections against arbitrary interest rate increases, requiring up to 21 days for customers to pay their bills (as opposed to 14 days before) and the reduction of the allowed amount of fine print that companies can include in contracts.
Cordray insists that the CARD Act has resulted in millions of Americans being able to set their own credit limits, avoid excessive and inappropriate fees and be able to view credit card agreements on-line, none of which were required and/or allowed before.
While the CFPB has not ruled out a “CARD Act 2.0” to round out some of the loopholes and missed issues not covered in the original legislation, it is highly unlikely to see any more reform this year with a divided American legislative government. The Democratic Party, the champion of this legislation, saw its control of the House of Representatives end in January 2011 and the resulting disagreements will most likely prevent any further reform until after the 2012 elections.
