With lawmakers threatening to speed up implementation of recent credit card reforms, Bank of America Corp. announced Tuesday that it would stop repricing its customers.
The move was instantly praised by Senate Banking Committee Chairman Chris Dodd, who along with other lawmakers wants to protect consumers from card companies rushing to raise rates and increase fees before the law takes full effect in February.
"Every other credit card company should follow suit," the Connecticut Democrat said in a press release. "This Congress has made it clear that abusive credit card practices are no longer acceptable."
In a letter to Dodd Monday, John Collingwood, the head of B of A's federal government relations, said the Charlotte company would temporarily halt repricing its customers.
"In light of the concerns expressed to us by our customers, Bank of America will not implement any change in terms (risk or economic based) repricing of consumer credit card accounts between now and the effective date of the Card Act," he wrote.
The B of A announcement precedes a House Financial Services Committee hearing scheduled for Thursday on legislation from Chairman Barney Frank, D-Mass., and Rep. Carolyn Maloney, D-N.Y., to speed up credit card reform implementation by two months.
Also Tuesday, a group of congressional Democrats pressed the Federal Reserve Board to require credit card companies to hand over more information to the central bank.
Under the Credit Card Act, the Fed must conduct a review of the consumer credit card market twice a year, including a study of credit card agreements and credit costs along with safety and risk issues.
But the law requires the Fed to work "within the limits of its existing resources" to carry out the study.
To get around that, the lawmakers urged the Fed to turn to provisions of the Truth in Lending Act to compel data on interest rates and revenue.
Gathering such data "would enable the board to compare the relevant credit card practices with those in place prior to enactment of the legislation," according to the letter, which was signed by Frank and Maloney as well as Sens. Carl Levin, D-Mich., and Claire McCaskill, D-Mo.