With Current Economic Climate, Consumers Need Protection From Predatory Lending Now More Than Ever (Rep. Steve Cohen)
August 20th, 2008
On July 31st, Congress advanced legislation to curtail unfair and deceptive credit card lending practices for the first time ever. The Credit Cardholders Bill of Rights (H.R. 5244) will go a long way toward correcting major credit card industry abuses and giving consumers the common sense protections they deserve. I was proud to cosponsor this landmark legislation introduced by Congresswoman Carolyn Maloney (NY-14) and ushered through the House Financial Services Committee under the leadership of Chairman Barney Frank (MA-04). I look forward to seeing this vitally important bill get a full vote on the House floor when Congress reconvenes in September.
Within the current economic climate, consumers need protection from predatory lending now more than ever. The Federal Reserve recently proposed regulating certain “unfair and deceptive” practices by the credit card industry, and Congress has responded in the appropriate way by drafting the Credit Cardholders Bill of Rights. The bill will require credit card companies to give cardholders advance notice of interest rate hikes, ban retroactive interest rate hikes on existing balances in most cases, give cardholders more control over their credit limits, and prevent credit card companies from issuing cards to minors.
As the economy worsens, more and more Americans must turn to their credit cards to help pay bills, fill up their cars, buy groceries and make ends meet. However, the credit card industry is making it impossible for many people to own credit and manage their debt with unfair and deceptive lending practices. Congresswoman Maloney and Congressman Frank should be lauded for their efforts to reform the credit card industry and undo some of the damage wrought by the disastrous bankruptcy bill that passed under the Republican-controlled Congress in 2005. These harmful lending practices hurt all Americans regardless of income and background, but in areas like Memphis, TN with large numbers of low-income families, the effects of abuses by lenders are exacerbated. I will continue to encourage my colleagues in the House of Representatives to help ensure that these reforms pass.
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