Under the Credit Card Accountability Responsibility and Disclosure Act (the CARD Act), you have the right to have interest rate hikes evaluated every six months, and reduced if the reasons for the original increase have changed.
But in implementing the law passed by your representatives, the Federal Reserve has issued a proposal to delay your right for a rate review until next year, and allow the banks to claim 'market conditions' are reason enough to jack up your rate - or even come up with new reasons to keep it there.This bad proposal would give banks a clear and unfair advantage.
Fortunately, the Federal Reserve has issued a comment period for you to weigh in. Make your voice heard by April 14th. Sign the petition and tell Fed Chairman Ben Bernanke that the CARD Act is for consumer protection not profit protection.
Regulation Z; Docket R-1384
Dear Chairman Bernanke:
This proposal does not go nearly far enough to create the consumer protections promised under the CARD Act, and leaves too much authority with the banks. Please strengthen in the following ways before implementation.
[Your comment will be inserted here.]
Start the review of interest-rate hikes sooner, and strengthen them. Consumers faced huge rate hikes while waiting for the CARD Act go to into effect, and this provision is our only chance to have those rates reevaluated and reduced. We can't wait another year --- banks should review rate hikes as soon as the regulations go into effect this year. Also, banks must review the rate hikes to determine if they are still valid, and should be prohibited from coming up with new reasons for the increase.
Restrict the size of penalty finance charges. Penalty interest rates should be considered a 'penalty charge' and addressed by the rule. Set rules to limit penalty finance charges to levels that are reasonable and proportional to the cost of the violation.
Restrict penalty fees to the lower of 5% of the amount at stake, or $10. Customers should never pay a penalty fee that is more than 5% of the amount at stake, and the Board also should adopt a low cap.
Keep the ban on inactivity, declined transaction and account closure fees. Customers are getting hit with new fees for not using their cards. The Board did the right thing to ban fees for actions that have no costs associated with them.
It is critical the Board issue the strongest rules possible to protect consumers, since the banks continually come up with new ways to get around the consumer-protection laws. I urge you to give me the protections I was promised under the CARD Act, and issue the strongest rules possible.
