Justice Delayed

In a little publicized news item, on December 18 the Office of Thrift Supervision approved new regulations on the credit card industry to crack down on what it said were deceptive and abusive tactics toward consumers by the credit card industry. Among the practices to be outlawed include:

-- Prohibiting credit card companies from raising interest rates
on money already borrowed unless the money was borrowed on a
variable rate card, or the minimum payment is made more than 30
days late.
-- Protecting new cardholders by prohibiting interest rate hikes
in the first year of an account. The only way interest rates
can go up in the first year is if the card issuer disclosed a
future rate hike at a preset time when the account was opened.
-- Imposing a new rule that zero interest means zero, ending the
practice of so-called deferred interest.
-- Prohibiting credit card companies from charging a late fee if
the bill was mailed to the consumer less than 21 days before
the due date.
-- Requiring payments to be allocated fairly among credit card
balances with different interest rates. Payments must be
allocated to the highest interest balance or pro rata.
-- Prohibiting credit card companies from charging interest on
amounts already repaid, through two cycle billing.
-- Restricting the financing of fees on credit cards where the
fees or deposits use up the majority of the available credit on
the account.

These all sound good but these changes will not be implemented until July 2010. Unbelievable!! These companies who have been abusing consumers for years including changing their interest rates without warning and retroactively applying these changes to existing balances will be given 18 months to adjust to new regulations. Can anyone doubt that this means 18 months in which to implement as many of these abusive policies as possible on their customers before they can no longer do so. Far from reigning in the card companies the Feds have created the perfect excuse for these companies to raise interest rates on existing customers swiftly and without conscience. Not that an excuse was ever needed for these legal crooks.

If Congress fails to act to implement these new regulations immediately in the form of federal legislation as opposed to the thrift regulators internal regulations it will once again prove that our congress, Democrats and Republicans alike, are in the pocket of the Banking industry to the point of powerlessness. Of course we already have 700 billion reasons to believe this. If the congress can take one week to create and approve a 700 billion dollar bailout bill, it seems that it could take even less time to adopt the Office of thrifts new regulations in whole and implement them immediately.