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Blumenthal calls on Fed to require credit card rate reductions
By Sam Craine on Apr 14th, 2010
An official is calling on the Federal Reserve Board to enact rules that would strengthen the position of consumers regarding credit card rates and fees.
Connecticut Attorney General Richard Blumenthal recently wrote a letter to Fed Chairman Ben Bernanke saying that recent rules created by the central bank regulating credit card rate increases are "woefully inadequate." The board's rules come by way of the Credit Card Accountability, Responsibility and Disclosure Act, which requires card companies to review rate increases.
Many issuers increased rates on their customers before the bulk of the Credit CARD Act took effect in February. The regulations do require companies to review changes made after January 1, 2009, although some consumer advocates say the rules do not go far enough.
Blumenthal urged the Fed to require card companies to reduce increased rates in cases where consumers' actions did not warrant the hikes.
"Such reductions would be fully consistent with Congress' intent in the CARD Act to prohibit arbitrary and retroactive rate increases," Blumenthal said.
While consumers continue to deal with higher rates and fees, one option they may consider is a debt management plan, which can reduce the amount they end up paying in interest payments.
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