April 30, 2008
DODD INTRODUCES MAJOR REFORM OF CREDIT CARD PRACTICES; BELIEVES INDUSTRY CHANGES ARE NECESSARY TO PROTECT AMERICAN CONSUMERS
WASHINGTON, DC – Senator Chris Dodd (D-CT), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, today introduced comprehensive legislation to improve credit card billing, marketing, and disclosure practices. The Credit Card Accountability, Responsibility and Disclosure Act (the C.A.R.D. Act) is aimed at stopping credit card practices that drag consumers into staggering amounts of debt, and too often harm, rather than help, the ability of American families to move up the economic ladder.
“Credit cards can be a valuable financial tool for millions of Americans. When used wisely, and on fair terms, credit cards can help families better position themselves to pursue financial goals such as owning a home or financing higher education for their children. Unfortunately, however, credit cards too often pose a potential to harm consumers rather than help them. Confusing, misleading, and in some cases predatory practices have become standard operating procedure for some in the credit card industry.
This is particularly troubling in today’s economic environment, where consumers are increasingly unable to pay their credit card bills due to rising gas and food prices, skyrocketing health care costs, and a mortgage crisis that has robbed many families of another financial resource – their home equity or, worse yet, their homes.
“Americans do not deserve to be pushed down the economic ladder by credit card companies. It’s wrong, it’s unfair, and it must end. The CARD Act will protect Americans by bringing an end to wrongful credit card practices and helping to provide consumers with a fair chance to secure economic security in their futures.”
Senator Dodd launched an examination of the credit card industry within days of becoming Chairman. At a January 2007 hearing, Dodd put the industry “on notice,” cautioning card issuers to avoid practices that are deceptive, misleading and predatory. While some companies heeded Dodd’s call, too few changed their policies and behaviors. The CARD Act will strengthen the credit card industry’s regulation and oversight, and prohibit unfair and deceptive practices such as universal default and double-cycle billing.
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