Congresswoman Maxine Waters calls on Credit Card Companies to end Unfair Practices and Treat Customers Better

Congresswoman Maxine Waters (D-CA) reiterated her call for credit card companies to end unfair practices that hurt American consumers as the House of Representatives today passed the Credit Cardholders' Bill of Rights (H.R. 627).  Congresswoman Waters was an original co-sponsor of the legislation, which included an amendment she introduced addressing how card issuers are treating credit lines.

"Credit card companies are engaged in outrageous and unacceptable practices including charging excessive fees and exorbitant interest rates.  They are arbitrarily changing the rules and terms that apply including changes for loyal customers who have a record of consistently paying their bills on time.  Even in the best of times this is bad business, and now during a recession it adds to the financial burdens of American families.  This situation is particularly galling because some credit card companies are receiving billions of dollars from taxpayers while gouging these same taxpayers with high interest rates and fees on their credit cards," said Congresswoman Waters.

The Credit Cardholders' Bill of Rights protects cardholders against arbitrary interest rate increases, excessive fees, due-date gimmicks and double-cycle billing.  The legislation also cracks down on misleading and deceptive marketing by credit card companies, prohibits them from issuing credit cards to minors, and curbs practices that result in high fees on low-income consumers with weak credit histories.  In addition, the bill empowers cardholders by giving them information and rights they need to make important financial decisions.

"The Credit Cardholders' Bill of Rights provides important financial protections for American families that are especially welcome during the current economic crisis," said Congresswoman Waters.

Almost half of American families currently carry a balance on credit cards, and for them the average balance was $7,300 in 2007.  One fifth of Americans carrying credit-card debt pay an interest rate above 20 percent.  This year credit card companies are expected to receive more than $20 billion from late fees, over-limit charges and other penalties.

The Federal Reserve determined that credit card companies engage in "unfair, deceptive, and anti-competitive" practices. 

Concerned about reports that some credit card companies are reducing credit limits and raising interest rates for customers based on factors including where they shop, their shopping choices and credit transactions, and who their mortgage lender is, Congresswoman Waters introduced an amendment that requires the Federal Reserve to report to Congress on such practices.

"These disturbing practices are affecting consumers who are otherwise in good standing with their credit card issuer.  Reductions in credit can hurt a consumer's credit score, making it difficult to refinance a home, buy a car, and even in some instances get a job.  We need to learn more about the extent of these practices, and if necessary I will introduce legislation to prevent this from happening," Congresswoman Waters said.

The Credit Cardholders' Bill of Rights is supported by consumer advocates, civil rights groups, public interest organizations, labor unions and the National Small Business Association.

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