You can put this one away in your ‘I can’t believe they didn’t see this one coming’ file but the Senate Banking Committee chaired by Sen. Chris Dodd is now asking regulators to check into interest rate increases made by credit card companies since the first of the year. Last Thursday the committee called for regulators to implement new rules forcing the credit card issuers to review rate hikes dating back to January 1, 2009.
Christopher Dodd (D-CT) stated that he is “disturbed” by reports that he has been receiving of credit card companies aggressively raising interest rates on the existing balances of cardholders ahead of the new laws that were put in place to prohibit this very practice. But once again I must ask, how in the hell did they not see this coming from a mile away to begin with?
Put another way, why didn’t they make the credit card reform legislation effective immediately and not put it off 9 months into the future? Sometimes I wonder what planet these politicians are from. At the very heart of the legislation are mechanisms to prohibit predatory practices by the credit card companies but they gave them an open 9 month window to do just that.
How could the lawmakers not see that by giving credit card issuers 9 months to do just about whatever they wanted to that they would not take full advantage of that? If this credit card reform legislation is a great idea in February of 2010 then how is it not a great idea… Right Now? Why would it not be immediately implemented?
Well, in any event Dodd wrote a letter to Federal Reserve Chairman Ben Bernanke asked if they would draft regulations that would allow them to immediately begin enforcing the provisions that will take effect next year. Those provisions call for credit card companies to do a review every 6 months and to reduce the interest rate of cardholders that they deem to be less of a credit risk.
But that in itself begs another question, what is the definition of a credit risk and who defines it? If you detect a tone of disgust in this post then you are dead-on. It absolutely amazes me how obtuse these politicians can be. To say that they are out of touch with everyday people is an incredible understatement.