For Immediate Release
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167
Getting the Credit Card Industry Under Control
WASHINGTON - The Senate Banking Committee is holding hearings today on the credit card industry.
Available for a limited number of interviews, Manning is author of Credit Card Nation. He said today: "The credit card industry is the most unregulated sector of retail banking with an economic impact that could play an even greater role during this recession. With soaring interest rates driving tens of thousands of people into bankruptcy, the current credit card industry policies enable the affluent to, in effect, get free credit because they can pay off their balance each month. This means that poorer people end up footing most of the bill. And, with usury laws basically gone since 1978, many people are stuck paying exorbitant rates for things they bought years ago. Without limits on fees and interest rates, credit cards have been the cash cow for the consumer banking industry.
"Even worse right now is that credit card companies are restricting credit. This could turn a bad recession into a wide depression. Parts of the country already are in a depression. I was just in Michigan where some counties have unemployment rates of over 25 percent. People need to be able to rely on credit during a recession to take care of their basic needs.
"Further, you have credit card companies restricting credit on totally outrageous criteria. American Express has been basing credit limits in part on what stores you go to and the people that you shop with. Congress urgently needs to get this industry under control. The public is demanding accountability, but it's still an old-boy's club with lobbyists and Congress.
"If not addressed seriously, credit card debt could be the next bubble, after the internet and housing bubbles."
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