Monday, February 8, 2010

Credit Card Industry Responds to New Regulations with Pick-a-Rate

From the press release at the Center for Responsible Lending

Credit card companies are busy crafting new tricks and traps to bypass both Federal Reserve Board rules and new federal law set to take full effect in late February 2010, a new research report from the Center for Responsible Lending finds. Entitled “Dodging Reform: As Some Credit Card Abuses Are Outlawed, New Ones Proliferate,” the report explains why the nation’s 80 million families with one or more credit cards continue to be hit with arbitrary, unfair interest rate hikes and fees.

The study examined the practices of issuers that hold over 400 million credit card accounts and found at least eight specific industry practices that flourish despite federal efforts to rein issuers in. These practices make it all but impossible for the average person to determine the real cost of credit card debt. The ability and eagerness of credit card issuers to exploit loopholes in the new federal rules underscores why lawmakers need to pass legislation to create the Consumer Financial Protection Agency, as proposed by the White House and now under consideration by Congress.

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