IMGCAP(1)]
Congressional Democrats this week urged the Federal Reserve Board to force credit card companies to submit more information to the central bank.
Under the Credit Card Accountability Responsibility and Disclosure Act of 2009, 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, as well as 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 the reporting of data on interest rates and revenue, reports Collections & Credit Risk sister publication American Banker.
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 Reps. Barney Frank, D-Mass., and Carolyn Maloney, D-N.Y. as well as Sens. Carl Levin, D-Mich., and Claire McCaskill, D-Mo.
Also this week, 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 credit card reforms take full effect in February, praised an announcement by Bank of America Corp. that it would stop repricing its customers.
"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, BofA head of federal government relations, said the Charlotte, N.C.-based company temporarily would 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 … between now and the effective date of the CARD Act," Collingwood wrote.
