Credit card reform to come sooner?

credit card hangoverWe here at Walletpop have decried the rate-raising, fee-slapping tactics of the credit-card companies making one last grab at America's wallets before the new credit card reform legislation passed by Congress earlier this year goes into effect. Credit card companies' practices got so out of hand that the House of Representatives voted this week to put the changes into effect sooner.

This AFP article states that by a vote of 331 to 92, the House passed a bill that would implement many portions of the new legislation immediately, rather than February of next year as originally planned. According to this article in the Washington Independent, a similar piece of legislation that would implement the bill's changes sooner is working its way through the Senate, so it's possible that credit card relief could come to consumers more quickly.

Initially, credit card companies and banks that issue cards said they needed until February to make the changes required by the new law in their computer systems and corporate programs; as it turns out, they've instead been using that time to hike rates, add new fees and increase existing ones, and generally abuse the window of time they begged Congress to grant them. It's outrageous, and it's heartening to see that Congress has noticed what the credit card companies are doing and fast-tracking a law that would stop them.

Interestingly, it seems that many Wall Street types think the money card issuers were squeezing out of consumers is pretty important to those companies' bottom lines. The very same day the House voted to hurry up the credit reforms, the stock prices of the country's big banks took a nosedive. According to this article from Bloomberg News, banks, including Wells Fargo, JP Morgan Chase and Citigroup, all saw their stock prices drop in the wake of the House vote.

Even though many of America's big banks have taken billions in bailout money, it's telling - and somewhat disturbing - that the prospect of not being able to wring every last dime out of customers had such a strong effect. For our part, we'll keep our fingers crossed that Washington is successful in getting this legislation into the express lane and on the President's desk as soon as possible.
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