For Immediate Release
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167
Credit Card Regulation
WASHINGTON - Bloomberg reports: "The U.S. Senate might consider capping interest rates on credit cards, Banking Committee chairman Christopher Dodd said as the lawmakers began debating amendments to consumer-protection legislation. ... Senator Bernie Sanders, a Vermont independent, will offer an amendment limiting all lenders to 15 percent interest rates, he said in a written statement."
ROBERT MANNING, via Molly Weimer
Available for a limited number of interviews, Manning is author of "Credit Card Nation" and "Living With Debt." He said today: "Many people are understandably upset as financial institutions are getting money for nothing from the U.S. government while credit cards, which have been incredibly profitable, are still charging people over 29 percent. Just a few of the less obvious problems are that credit cards actually end up subsidizing richer people at the expense of poor people, and crucially now, credit cards are reducing lines of credit -- just when we need it most.
"There are some good aspects of the Dodd proposal, like someone has to be 60 days late before a credit card company can jack up the rates. But, for the rest of the bill's consumer-oriented provisions, they are not going to take effect for a year and there's still not going to be a federal ceiling on interest rates, as there is in the Durbin-Sanders bill. (U.S. Supreme Court decisions in 1978 and 1996 effectively ended interest-rate and fee caps and the U.S. Congress has not acted to remedy the situation.)
"I've been working with some credit unions that allow people to transfer their credit card debt to lower rates. We hope to save Americans $300 million over the next two years." See The American Debt Relief Challenge.
Director of the film "In Debt We Trust" and author of the book Plunder, Schechter, who is editor of MediaChannel.org, recently wrote the piece "American Expression: Card Companies Resisting Reforms," which states: "As the card companies began to experience the losses and uncertainties that their customers have long experienced, they began operating in a more predatory manner, jacking up fees and putting the collection pressure on. In England, the government mandated that credit card companies give customers more time to pay -- extending payment due dates by a month. In this country, the companies want us to miss those due dates so they can tack on forever escalating late charges and interest payments. These credit card costs have gone UP even as interest rates -- the amount they pay for money -- go DOWN. ...
"The credit card companies are squealing that any restrictions on them will hurt the economy, drive prices up and lead to financial Armageddon or worse. Most cardholders know that they will be hurt more unless something changes -- many credit cards have gone from a luxury to a necessity to a noose. Millions have become prisoners of debt, almost as if they are serfs and as if capitalism is going back in time to feudalism."
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