The credit card industry has come under tight scrutiny in recent months by our officials in Washington. Really, really tight scrutiny. The kind of scrutiny that Steve from Coupling (the UK version) says makes his ‘rear iris close.’ (You might not get that reference if you’ve never seen the show.)
At any rate (rate… credit card… get it?), if you’ve ever had your credit card interest rate jacked up for no apparent reason, it’s time to state your case to the Federal Reserve!
The Board of Governors of the Federal Reserve System are asking for public comment on the changes they propose to make to Regulation AA (Unfair or Deceptive Acts or Practices). The proposed changes include five key protections for consumers that use credit cards:
- Banks would be prohibited from increasing the rate on a pre-existing balance.
- Banks would be prohibited from applying payments in a manner that maximizes interest charges.
- Banks would be required to give consumers the full benefit of discounted promotional rates on credit cards by applying payments in excess of the minimum to any higher-rate balances first.
- Banks would be prohibited from imposing interest charges using the two-cycle method.
- Banks would be required to provide consumers a reasonable amount of time to make payments.
This is a beautiful thing. It’s something that finally benefits consumers and not the corporations. Sometimes, corporations get blinded by their need for excessive profits and as a result, lose any notion of common sense they might have previously had. At the highest level, this proposed regulation really does nothing but force some common sense business practices back into the credit card industry. It’s basically the Federal Reserve telling the credit card industry, “We gave you enough rope to hang yourselves by not over-regulating you and since you couldn’t play nice and took advantage of that, we’re changing the rules.”
Hey, come on. We’re Americans. We love to complain. Especially if we can do so without ever having to leave the keyboard. And, this is truly something worth complaining about. And, it’s so easy. Just click here. You’ll be taken to the press release. Scroll down to where it says Proposals for Comment and click Submit Comment under Regulation AA.
But note, all comments on proposals, however they are submitted (via the web site, by e-mail or in paper form) will be made available publicly (on the web site and elsewhere in paper form). So, I suggest you list an alternate e-mail address and a PO Box, if you have one.
