WASHINGTON — At least one credit card analyst confident Congress and the White House will push through new consumer protection legislation.
What it will mean to credit unions will depend on how the new language in the proposals will read. Bill Hardekopf, CEO of Birmingham, Ala.-based LowCards.com, noted President Obama used "presidential persuasion" to get his message across-a message Congress seems eager to embrace. "We won't know exactly what it will look like until the Fed reforms go into effect in July 2010, but then again the bills in the House and Senate might cause those reforms to happen earlier," he assessed. "All of the reforms deal with basically the same issues. They are not the same, but the central theme is consumer protection."
Credit card processors that work with CUs insist all the work needed to implement the Fed's December 2008 final rules will take until the effective date of July 1, 2010. CUNA celebrated the fact its lobbyists were able to persuade the House Financial Services Committee to push back the implementation date embedded in the legislation (if it were to pass): rather than three months after the bill becomes law, to the July 1, 2010 date. But Hardekopf is not convinced that amount of time is necessary.
"I'm not familiar with the operations end, and I don't work for an issuer so I don't know the details of what it takes to get that off," he acknowledged. "But I am skeptical of those comments because if we were allowing issuers to raise rates or shorten the amount of time for notice to consumers, I bet it could be done in less than 19 months.
"The issuers don't want to see these changes take place because it will affect their revenue; they will make less money," he continued. "Currently, issuers have the right to change someone's rate at any time as long as they give 15 days notice. That is a tremendous amount of freedom, and some of these reforms address that amount of freedom."
Hardekopf described LowCards.com as a free consumer resource website on credit cards. He said the site is differentiated from similar efforts in that it is comprehensive in ranking all credit cards available in the U.S. by grace period, interest rate and other factors.
Hardekopf is the author of "The Credit Card Guidebook," which is available free from the LowCards website.
