Remember the Credit Cardholders’ Bill of Rights? Congress passed it earlier this year as a way to protect the consumer from those mean old credit card companies. Part of the law gave credit card companies a little bit of lead time for the new regulations.
Some of the regulations include longer lead times to interest rate changes, reduced fees that were deemed unfair, and an extension from 14 to 21 days on the minimum time billing statements can be sent out before they are due. Many of these new regulations do not go into effect until February of next year.
The credit card industry of course protested many of these changes and said some of them would require an increase in fees or interest rates. To a certain extent I agree with this. Change is expensive for big firms. So why is Congress surprised that credit card companies are taking advantage of the generous lead time and jacking up interest rates and fees while they still can?
If you must make a profit to keep your job, you’re going to do whatever you can to make that profit. The credit card companies are doing exactly what Congress has allowed them to do. We can only expect these companies to do this.
Congress passed legislation yesterday that made many of these changes effective immediately, as if they’re somehow punishing the credit card companies.
When will Washington learn that you can only expect companies to do what they are legally allowed to do? In a monopolistic industry (such as credit cards) this is the only outcome. I’m not disappointed in Bank of America, Capital One, Chase, and anyone else, I’m disappointed in Congress. Photo: rpongsaj
 By The Weakonomist |
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So you are suggesting they should have originally made the changes take effect immediately?
I agree.