Disclosure note: I'm working with UnfairCreditCardFees.com to help raise awareness about the interchange fee, and cross-posting a slightly different version of a post that first appeared at Michigan Liberal today.
At this site and others, you might recently have heard about the credit card interchange fee and Sen. Chris Dodd's efforts to expose predatory lending practices. And as I stated in that diary, I'm doing some work with UnfairCreditCardFees.com to shed some light on interchange fees and how they hurt every consumer in America. Tomorrow morning (3/7) Sen. Levin is shedding further light on the credit card industry in a hearing entitled, "Credit Card Practices: Fees, Interest Rates, and Grace Periods." According to the committee website:
It is the first of several Subcommittee hearings that will examine a variety of credit card practices that raise concerns. This hearing will focus on how credit card issuers apply interest rates and fees to consumer accounts. It will examine, for example, how credit card issuers select and apply interest rates and, for consumers carrying a balance forward, eliminate grace periods for repaid debts. It will also analyze high fees charged for late payments, over-the-limit charges, and other matters, including how those fees are assessed, how they add to interest costs, and how they contribute to consumer debt. In addition, the hearing will examine an industry practice requiring consumer payments to be applied first to balances with the lowest interest rates instead of to balances with the highest interest rates. The hearing will draw, in part, from a September 2006 GAO report detailing the finance charges, fees, and disclosure practices associated with 28 popular credit cards.
According to an American Banker (that is behind a pay door), the credit card companies are none too happy about this increased negative exposure and are worried about the fallout coming from this increased scrutiny coming from Capitol Hill.
Lobbyists said they worry that the hearing - featuring witnesses from Citigroup Inc., JPMorgan Chase & Co., and Bank of America Corp. - will draw significant negative press attention, putting a dent in their reputations and pressuring other lawmakers, like Senate Banking Committee Chairman Chris Dodd, to act. [...] Publicly, industry representatives said their hope is to try to rebut any charge that credit card companies routinely use unfair or deceptive practices. [...] But privately, industry lobbyists said they know credit card companies are under increasing scrutiny. Sen. Dodd has already promised a series of hearings in the Banking Committee on credit card practices, and several consumer groups are promoting an independent documentary, "Maxed Out," that chronicles consumer problems with credit card debt.
Hopefully these hearings and the efforts of Senators Levin and Dodd can serve to raise awareness amongst not only other lawmakers but also consumers whom the credit card industry has intentionally kept in the dark for far too long. While the hearing will not be televised, the committee website will have streaming audio starting at 10 AM EST.
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