| Skelton says new law halting abuse by credit card companies is crucial |
By: U.S. Rep. Ike Skelton
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Posted: Monday, March 1, 2010 12:42 pm
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Congressman Ike Skelton
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WASHINGTON, D.C. (Feb. 28, 2010) — For years, credit card companies have used tricky fine print, hidden fees, and unannounced interest rate increases to gouge people across the country. These practices have repeatedly punished responsible families and small businesses, especially as the economy worsened over the past several years. Halting these practices is yet another way Congress is working to rebuild an economy that works for families and small businesses, not just Wall Street bankers.
That is why it was essential to pass landmark credit card reforms last year, reforms that take effect this week. Many of you have received notices from banks and credit card companies describing some of these changes, but I wanted to take a moment to share some of the most important aspects of H.R. 627, the Credit Card Accountability, Responsibility, and Disclosure Act of 2009.
First, this act bans interest rate changes on existing balances, due-date gimmicks that allow companies to charge exorbitant fees, and fine-print tricks like charging to pay a bill by phone. According to the Pew Charitable Trust, consumers are expected to save over $10 billion a year from these changes.
However, the new law goes further. It mandates that credit card companies explain, in clear language, the terms and conditions of their cards. Just as it is illegal to sell someone a toaster that will burn down their house, tricking people into accepting credit cards that destroy their finances should also be prohibited. This law does that.
Small businesses and middle-class Americans have always driven the American economy, and they will continue to do so into the 21st Century. That is why it is so important to ensure that CEOs and large financial corporations cannot take advantage of honest, responsible people. By giving residents of the Fourth Congressional District the information and rights needed to make informed decisions about how they spend their money, this bipartisan legislation is just one of many ways Congress is working to strengthen everyday Americans and build a more stable economy in the future.
Congressman Ike Skelton (D-Mo.) serves as chairman of the House Armed Services Committee. Congressman Skelton’s website is at www.house.gov/skelton.
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