Model Credit Card Reform Advocacy Letter
[Date] Re: Fair Credit Card Agreements and Clear Disclosures Dear : As a New York State consumer, I am seriously concerned about the unfair practices adhered to by credit card companies. Credit card issuers continue to restrict my ability to make informed decisions about credit card options with their fine print, and ever changing, exceedingly advanced legal contract terms. Since the credit card industry and federal banking regulators have almost exclusive control over the terms of my credit card agreement, I am calling on Congress to address abuses within the industry. I respectfully urge you to be part of the solution for me and all consumers. I appreciate the fact that the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration issued new credit card rules in December 2008. These regulations make great strides by (1) prohibiting creditors from increasing any annual percentage rate (APR) applicable to an existing balance on a credit card account except in limited circumstances, (2) outlawing double-cycle billing practices, and (3) mandating creditors to send periodic statements to cardholders no less than twenty one (21) days before the due date. However, these new regulations will not go into effect until July 1, 2010. On April 30, 2009, the House of Representatives passed HR 627, the Credit Cardholders Bill of Rights Act, which is sponsored by New York Congresswoman Carolyn Maloney. This proposal is similar to HR 5244 that passed the House of Representatives last year but failed to advance in the Senate. I urge the Senate to act now to strengthen credit cardholder protections, and to not allow this opportunity for great change to pass us by. In addition to the regulatory relief provided above, this Act goes further by (1) requiring creditors to allocate payments in excess of the minimum payment to the portion of the balance with the highest APR interest rate; (2) protecting cardholders from misleading terms; (3) requiring cardholders to opt-in to receiving over-the-limit “protection” from issuers; (4) enhancing disclosure to cardholders regarding minimum payments and the cost of credit over the next three years; and, (5) setting standards for students to qualify for credit cards. The Act provides this much needed relief within one (1) year of enactment, but no later than July 1, 2010. However, it notably does provide more immediate relief for cardholders receiving interest rate increases by requiring that within ninety (90) days of enactment such increase may only occur after a 45-day notice period has been given to the cardholder. Clearly this Act is a more ambitious and consumer friendly plan than the current federal regulatory plan. Regrettably, state consumer protection laws are virtually unenforceable in addressing these concerns, thus this issue requires immediate Congressional attention. During this 111th Congressional Session, I call upon the United States Senate to work with the House of Representatives, and to act to pass strong credit card reform measures. In order to use credit responsibly, consumers need and deserve a level playing field. It is imperative that another year does not go by without providing consumers this much needed relief. I thank you in advance for your efforts to protect consumers from the financial hardship and ruinous debt that is perpetuated by current credit card industry practices.