**EDITORIALS**

**New York Times**

**August 6, 2008**

**Editorial**

# Listen to the 56,000 

When the Federal Reserve asked for comments on its proposed rules on
abusive credit card practices, an astonishing 56,000 poured in. Most
were from outraged consumers. They told of interest rates skyrocketing
when they paid an unrelated bill late. They complained of unwarranted
late fees and pushed-up due dates. One Pennsylvania customer fumed: "I'm
fed up with credit card company tricks that drive us deeper in debt."

This anguished deluge should send a clear message to leaders in
Washington. The Federal Reserve should swiftly adopt its proposed rules
against unfair or deceptive credit card practices. But the real burden
to curb these abuses falls on Congress.

For too long, members of Congress have shirked the responsibility to
ensure fair lending to credit card customers and have listened more
intently to the banking lobbyists. A low point came in 2005, when
Congress passed a bankruptcy law that was badly tilted against
borrowers. It gave extra protections to lenders against unscrupulous
debtors. But it also made it much harder for people to declare
bankruptcy, even when the economic crisis was caused by sickness or
family tragedy.

Ronald Mann, a Columbia Law School professor, has argued that the law
creates a "[sweat
box](http://works.bepress.com/cgi/viewcontent.cgi?article=1013&context=ronald_mann)
of credit card debt." As borrowers become "distressed," the credit card
issuer has more time to pile on interest charges and fees until the
client actually goes bankrupt. As heartless as that bankruptcy law has
been for beleaguered consumers, the Democrats, who have controlled
Congress since 2006, have not fixed it.

They did take one step forward last week. By a 39-to-27 vote, the House
Financial Services Committee approved a cardholders' bill of rights that
was sponsored by Representative Carolyn Maloney, Democrat of New York.
It would stop credit card companies from raising interest rates on
balances incurred under an old rate. It would let consumers pay off
loans with higher interest rates first. And it would stop unfair late
fees and "universal default," the practice of raising interest rates on
accounts in good standing when a borrower falls behind on other bills.
This borrowers' bill of rights should move quickly to the House floor,
and Christopher Dodd, the Democratic chairman of the Senate Banking
Committee, should support similar legislation in his chamber.

The banks are openly fighting both the Maloney bill and the Federal
Reserve rules. They warn of unintended consequences, mainly that less
credit would be available to consumers. They also argue that most
cardholders are happy and that the complaints are just "anecdotal."

The huge file of [comments at the Federal
Reserve](http://www.federalreserve.gov/generalinfo/foia/index.cfm?doc_id=R-1314&doc_ver=1)
contains plenty of anecdotes, and there are surely many more where those
came from. Congress should give consumers what they need and deserve ---
fair and clear lending rules for credit cards.

**Frederick News Post**

**Charge it**

**Originally published August 06, 2008**

A comprehensive credit card reform bill was introduced in the U.S. House
of Representatives last week, and Marylanders should be interested in
its provisions.

Why Marylanders? Because Maryland is among the top five states when it
comes to credit card debt. According to a recently released report by
the group Americans for Fairness in Lending, Maryland ranked fourth
among all states for highest median credit card debt per borrower for
year-end 2006.

The figure for Maryland was \$2,042, and because that\'s the median,
half of all these folks have even higher debt. We also suspect that
these numbers may be worse now than they were seven months ago, with
more and more cardholders turning to plastic to help them deal with the
economic downturn and/or price of staples such as gas and food.

Marylanders, then, perhaps more than most other states\' residents, will
be interested in the Credit Cardholders\' Bill of Rights Act of 2008.
The legislation, which is being billed on the website of Rep. Carolyn B.
Maloney, D-NY, who introduced it, as \"comprehensive credit card reform
legislation aimed at leveling the playing field between credit card
companies and consumers.\"

According to Maloney, \"A credit card agreement is supposed to be a
contract, but in recent years cardholders have lost the ability to say
no to unfair interest rate hikes and fees.\"

She goes on to say that her bill seeks no rate caps, fees or price
controls.

So what will it do for credit cardholders? A lot.

Among its more important provisions are:

--- protecting cardholders against arbitrary interest rate hikes;

--- preventing cardholders who pay on time from being unfairly
penalized; and

--- protecting cardholders from payment due-date gimmicks.

It has a number of additional provisions, but the three mentioned above
are at the top of the list of complaints that cardholders have been
grousing about recently --- and rightfully so.

Credit cards can be a blessing or a curse, depending on how their
holders use them --- and how companies who issue them treat their
customers.

We\'ve heard a lot of horror stories lately about just how some of these
companies are doing business, including raising interest rate levels
dramatically, even for their best customers --- those who faithfully
make their payments on time.

For those interested in reading the fine print of the bill, go to:
http://maloney.house.gov/documents/financial/h.r.5244billtext.pdf and
check it out.

Having and using credit cards responsibly is a chore for many folks to
begin with. Being on a level playing field with the companies that issue
them is only fair and right.

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of Service.

**Detroit Free Press**

**FREE PRESS EDITORIAL**

**No small change for credit cards**

**Americans would save billions if Congress writes strong checks on
industry abuses**

**August 3, 2008**

As they continue to aggressively market the wonders of plastic, the
nation\'s credit card companies have invited further regulation by their
unwillingness to change billing and interest practices that range from
confusing to deceptive and downright abusive. Official Washington is
moving on several fronts: Bills have been introduced in the House and
Senate, and the Federal Reserve Board has proposed new rules.

None of these efforts can stop people from getting too deep in debt.
None of them should absolve debtors from paying their bills.

But the terms should be clear and fair; consumers have a right to know
their obligations before the bills get out of control.

Last week, the House Judiciary Committee voted to move forward with the
Credit Card Fair Fee Act, aimed at \"interchange fees,\" the charge of
2% or so banks or credit card companies levy for the use of their
plastic. Retailers estimate that the average family unknowingly pays
\$427 a year in added costs because of transaction fees built into
retail prices. That generates \$48 billion a year for the credit card
companies.

The legislation would require them to negotiate these fees based on
costs, rather than just impose them.

Also before the House is the Credit Card Bill of Rights, which, among
other provisions, would stop credit card companies from slapping higher
interest charges on debts incurred at a lower rate or requiring
consumers to pay off lower-rate balances before payments are applied to
debts incurred at higher interest.

Meantime, the Fed Board has issued a 162-page proposal for changes in
the credit card industry. These include prohibitions on banks imposing
fees for such things as a hold being placed on credit or for paying off
an overdraft. A number of the Fed\'s other proposals are aimed at the
fees banks seem to charge for every kind of credit card hang-up, whether
there\'s a cost to the bank or not.

U.S. Sen. Carl Levin of Michigan, who began calling attention to credit
industry practices through his investigations subcommittee two years
ago, is cosponsoring, with Sen. Chris Dodd of Connecticut, a bill that
addresses billing, marketing and disclosure by credit card companies.

Among provisions of their Credit Card Accountability, Responsibility and
Disclosure Act (or CARD Act):

• No interest on any portion of debt paid on time or on fees; no
retroactive interest rates on unpaid debt; no more \"any time, any
reason\" interest rate boosts.

• No increase in interest rates based on the cardholder\'s use of
another company\'s card.

• Restrictions on fees for exceeding a credit limit; no pay-to-pay fees
for making a payment by a certain method.

• Require that debt payments be applied first to the card balance with
the highest interest rate.

• Require that cardholders be offered the option of a fixed credit limit
that cannot be exceeded.

• Require bills to be sent out 21 days before payments are due.

• Require card issuers to disclose how long and how much it will take to
pay off a bill if only minimum payments are being made.

There\'s more, but you get the drift.

If all the proposed reforms were enacted, Elizabeth Warren, Leo Gottlieb
Professor of Law at Harvard Law School, says \"the CARD Act could save
families more than \$1 billion each year by cutting out the most unfair
of the penalty fees and sky-high interest rates. Families need this
help.\"

Credit card companies are, predictably, digging in for a fight, but this
is a situation largely of their own making. They have sold their
products as essentials, even to the point of declaring you should be
embarrassed if you hold up the line to pay cash. If your product is such
a utility item, it ought to be regulated like one.

\"As Americans try to get out of credit card debt, the credit card
companies are tilting the playing field in their favor,\" says U.S. Sen.
Claire McCaskill, D-Mo. \"Common industry practices take advantage of
consumers by hiking interest rates for things like taking out a new
credit card or spending close to your credit limit. If we\'re not
careful, credit card debt could very easily become the next subprime
mortgage crisis.\"

And one of those is more than enough.

**Minneapolis Star-Tribune**

**Editorial: Credit card reforms are long overdue**

**July 26, 2008**

At the same time the federal government is bailing out a banking
industry reeling from the real estate collapse, it\'s also taking some
less-heralded but significant consumer protection steps aimed at the
industry\'s cash cow: credit cards.

Over the past decade, consumers have been increasingly subject to
questionable billing practices that made credit card companies billions
while keeping cardholders in hock for perpetuity. Among them is
something called \"universal default,\" which allows card companies to
raise interest rates if you paid your bill on time but were late with a
different firm. Other issues of concern include billing practices
designed to increase late fees and so-called double-cycle billings that
allowed card companies to charge interest on something that was paid
off.

Help is long overdue, but the good news is that strong protective
measures are under consideration in two places with the clout to really
make a difference \-- the Federal Reserve and Congress.

The Federal Reserve sets banking practice rules. And while its past
consumer protection measures have essentially resulted in cardholders
receiving more incomprehensible paperwork under the guise of disclosure,
these proposed new rules have some welcome teeth. Banks, except under
limited circumstances, can\'t raise the interest rate on preexisting
balances. Double-cycle billing is forbidden. There are provisions to
prevent late fees and universal default interest rate increases. If
there is a late payment, banks also could not raise your interest rate
on existing balances until the account is 30 days past due.

Congress, which took up credit card reform when it came back from the
July 4th break, is also weighing similar protective steps with the
Credit Cardholders\' Bill of Rights, which has been championed by
Minnesota\'s Fifth District congressman, Democrat Keith Ellison. The
bill has wide support from consumer advocacy groups and is expected to
be voted on by the House financial services committee this next week.

The timing of these protective steps could not be better. The economy is
ailing, and Americans are struggling with massive amounts of consumer
debt \-- \$2.56 trillion nationally. Since 2000, the amount of credit
card debt carried by the average household has risen 15 percent to about
\$8,500. All those late fees and mysterious tweaks in interest rate
calculations add up to a lot of money. It\'s easy to see why the banking
industry is fiercely lobbying to maintain the status quo. Among its
arguments: Why take away a moneymaker when the industry is struggling?

Consumers still have time to make their voices heard. The Fed is
accepting public comment about its proposed rules until Aug. 4. Letters
and e-mails to congressional representatives will also help push this
much-needed legislation through. Banks may be hurting, but so are
consumers. Regardless of the economy, cardholders deserve fair treatment
and billing practices that aren\'t designed to keep them in debt. In
other words, they deserve better than what they\'re currently getting.

© 2008 Star Tribune. All rights reserved.

**Leveling playing field for U. S. consumers**

**Tuesday, August 05, 2008**

**DANIEL LEDDY**

**Staten Island Advance**

STATEN ISLAND, N.Y. \-- Last week, landmark legislation popularly known
as the Credit Cardholders\' Bill of Rights successfully cleared the
House Financial Services Committee. Introduced by Congresswoman Carolyn
B. Maloney (D-NY), the proposed law would impose critically needed
reforms on an industry that has ruthlessly exploited consumers for
years.

While today\'s tough economic times may accentuate their pain, the truth
is that consumers have always been at a distinct disadvantage in the
marketplace. This is because large corporations and other organized
business entities, thoroughly versed in the psychology of sales,
routinely use deceptive practices to squeeze as much money as they can
out of unwary shoppers.

Walk into any department store and you will be greeted with a bevy of
signs trumpeting sales on what seems like half the store. Check out
those signs closely, however, and you will notice that the great
majority of the touted discounts are off the \"original price.\"

What the stores don\'t tell you is that the \"original price\" is phony,
an artificially high number for which the item may never have been
offered to the public. Its real purpose is to con buyers into thinking
that they are getting the item at a deep discount when, in fact, they
are paying either the regular price or something very close to it.

Supermarkets play games with consumers all the time. An item tagged as a
\"managers special\" might actually be offered at its regular price or
even higher. Food shoppers also have to contend with the phenomenon of
the incredible shrinking package, a sleight of hand by which a price
hike is effected not by raising the price per se, but by reducing the
quantity of the item in the container. In an effort to deceive
consumers, manufacturers strive to make the smaller container look very
much like the larger one that it replaced.

Consumers in need of home repairs or other major improvements are apt to
find businesses offering coupons for large discounts. However, these
seemingly impressive savings invariably require the consumer to present
the coupon at the time that an estimate is given. This allows the
estimator to raise the price quoted to a number that offsets the
coupon\'s value.

Retail car sales present a veritable minefield for consumers. As with
all businesses, there are certainly some honorable dealerships. However,
the gimmicks employed by the disreputable ones put consumers at risk of
being scammed during every single stage of the car-buying process.

PREDATORY INDUSTRY

Maloney\'s bill is an example of the kind of bold action that
legislators must take to level the playing field for American consumers.
As introduced, it targets many of the worst abuses of a predatory
industry that easily ranks number one in scamming consumers.

These include the so-called \"universal default clause\" under which a
credit cardholder can be declared in default and, hence, subject to
higher interest rates for being late in any payment owed to any other
creditor or to an entity such as the gas or electric company. It\'s but
one of many outrageous financial time bombs that credit card companies
have inserted in their pages of very small print.

Another common clause similarly camouflaged permits credit card
companies to increase the interest rate that it charges at any time, for
any reason, or for no reason at all. Maloney\'s legislation would
require companies to specify in writing the circumstances under which a
raise in interest rates may be effected.

This reform is simply a matter of common sense. If credit card
agreements are contracts, as they purport to be, then neither party
should have the right to change the terms unilaterally.

Maloney\'s bill would also put an end to so-called \"double-cycle
billing\", yet another shocking abuse whereby consumers are charged
interest on credit card balances that they\'ve already paid off.

Unaddressed by Maloney\'s legislation is the ability of credit card
companies to exploit a loophole in the law to circumvent state usury
laws and charge interest rates that would cause professional loan sharks
to blush. Still, it is one of the most important consumer protection
measures to be introduced in years and deserves swift passage by
Congress.

A cold, hard look at American business practices in general leads to two
conclusions. The first is that what we have been conditioned to accept
as \"business as usual\" is good for businesses but bad for everybody
else. The second is that it\'s time to junk a business model predicated
on \"Let the buyer beware\" and replace it with one that would \"Make
the seller be honest\".

To that end, it should be clearly underscored that a seller is not being
honest when essential information that consumers need to make informed
judgments is buried in small print that few can read and even fewer can
understand.

Daniel Leddy\'s On The Law column appears each Tuesday on the Advance
Op-Ed Page. His e-mail address is JudgeLeddy@si.rr.com.

©2008 SI Advance

© 2008 SILive.com All Rights Reserved.

**The Miami Herald**

**Also printed in The Record (NJ)**

**June 30, 2008**

**HEADLINE:** The credit card trap\
\
**BYLINE:** By CAROLYN B. MALONEY, LINCOLN DAVIS and KEITH ELLISON, Wire
Services\
\
**BODY:**\
\
\
MORE AND MORE Americans are turning to their credit cards to help pay
bills, buy groceries and simply make ends meet in this troubled economy.
As a result, consumer credit card debt is now closing in on the \$1
trillion mark - double the amount held in 1996. This trillion-dollar
tower of unsecured debt is looming large above our troubled economy and
threatening to worsen an already perilous credit crisis.\
\
Recent news reports show that even as the Federal Reserve has cut
interest rates to try and boost our economy, credit card companies have
raised rates on cardholders - even those who pay on time - in an effort
to try and plug losses they\'ve suffered in other areas of their
business. That\'s because the playing field between credit card
companies and credit cardholders has become very one-sided in recent
years.\
\
It\'s probably no surprise that it\'s average American cardholders, and
not the big credit card companies, who are getting the short end of the
stick.\
\
The winds of change appear to be blowing, however. In a historic move,
the Federal Reserve recently acknowledged that there are unfair and
deceptive practices in the credit card industry, and proposed regulatory
rules for doing away with many of them.\
\
Some of the practices the Fed identified as unfair and deceptive are the
same ones that we have proposed curbing in new legislation, the Credit
Cardholders\' Bill of Rights (H-5244): raising interest rates on
existing balances - and doing so even to good cardholders who pay on
time and never go over their credit limit - charging interest on
balances that have already been paid off, unfairly allocating payments
to make it difficult for cardholders to pay off higher interest rate
balances, and marketing fee-heavy \"subprime\" credit cards to
unsuspecting customers.\
\
It\'s encouraging that the Fed clearly agrees with the need for these
solid and balanced credit card reforms.\
\
Watering down protections\
\
By the time the Fed gets around to finalizing its regulatory proposals,
however, they may be watered down and come too little, too late for
struggling consumers who need help now. Just as we couldn\'t wait for
the regulators to get around to helping the millions of Americans facing
foreclosure, we can\'t count on them now to act quickly and help the
millions of Americans being driven deeper into credit card debt.\
\
The mortgage reform regulations the Fed proposed more than a year ago
still have not been enacted. And what is done by regulation can easily
be undone by regulation. Legislation is the only solid and lasting
solution.\
\
It\'s probably no surprise that some in the banking industry oppose our
bill and the Fed\'s new regulatory proposals. These opponents are
pushing for zero intervention into the escalating credit crisis, just as
they argued for a hands-off approach to the subprime crisis.\
\
The plain truth is that the Fed is the federal agency responsible for
steering our economy and ensuring the safety and soundness of our
financial institutions, and it has affirmed what many in Congress have
been saying all along: There are unfair and deceptive credit card
industry practices that should be eliminated.\
\
Bill of rights\
\
We are on the verge of cracking down on credit card industry abuses for
the first time in decades. The Fed\'s recent action only adds to the
incredible momentum for legislative reform that has been building.\
\
The Credit Cardholders\' Bill of Rights now has the support of leading
consumer advocates, and groups as diverse as the National Small Business
Association and the Service Employees International Union.\
\
It also has the support of 145 co-sponsors from different parts of the
political spectrum. We may not agree on everything, but we do agree that
American consumers deserve a level playing field.\
\
Instead of waiting for the Fed to act or for the next shoe to drop in
the credit crisis, Congress should take swift action to reform major
credit card industry abuses and improve consumer protections for
cardholders.\
\
Rep. Carolyn B. Malone, D-N.Y., chairs the House Financial Institutions
and Consumer Credit Subcommittee. Reps. Lincoln Davis, D-Tenn., and
Keith Ellison, D-Minn., are members of the House Financial Institutions
and Consumer Credit Subcommittee.

> **The Philadelphia Inquirer**
>
> **\
> June 15, 2008 Sunday\
> ADVANCE Edition**
>
> Women & Money: Fed\'s credit-card proposals offer needed protections\
> \
> **BYLINE:** By Suze Orman; Inquirer Columnist\
> \
> **SECTION:** IMAGE; Inq Col Suze Orman; Pg. M02\
> \
> **LENGTH:** 607 words
>
> In early May, the Federal Reserve issued a series of new proposals
> designed to curtail some of the more egregious practices of the
> credit-card industry, while also requiring card companies to better
> disclose their rules to customers.
>
> Currently in the United States, there is more than \$900 billion in
> outstanding debt, much of it accruing interest at rates well above 15
> percent and susceptible to arcane rules and practices that generate
> major fee revenue for the credit-card companies.
>
> But I suppose we\'ll have to be grateful for this
> better-late-than-never approach. And the Fed\'s proposed rule changes
> do offer some solid consumer protections:
>
> Credit-card issuers wouldn\'t be able to arbitrarily increase the
> interest rate on your card. There would have to be a concrete reason
> for raising the rate, such as failure to make the minimum payment by
> the due date, or a change in the underlying index that\'s used to set
> the interest rate.
>
> Statements would have to be mailed at least 21 days before the payment
> is due rather than the current minimum of 14 days. This is intended to
> make it less likely that credit-card issuers can catch cardholders
> off-guard by moving up a due date, so the cardholder ends up making a
> late payment. With late fees averaging \$39, it\'s easy to see why
> card companies have been happy to push customers into being late.
>
> Card issuers would be prohibited from using your payments to pay down
> only your balances with the lowest interest rate. This practice has
> been a credit-card company favorite: Lure new customers in with a low
> introductory rate for a balance transfer, then impose a high interest
> rate on new charges or cash advances. Then, when the cardholder makes
> a payment, it\'s credited to the low-rate balance rather than the
> higher-rate debt. The new regulations would require that at least a
> portion of every payment be credited to your high-rate debt.
>
> The two-cycle billing system would be abolished. This practice, used
> by many card issuers, creates a higher balance due for cardholders who
> have an unpaid balance only from time to time.
>
> A year ago, Congress held hearings to learn more about credit-card
> billing practices. No legislation ever came out of those hearings. A
> few of the major credit-card issuers called to the Hill to testify
> tried to play nice by voluntarily rescinding their use of Universal
> Default. That\'s the system whereby you can pay your credit-card bill
> on time, yet still see your interest rate skyrocket if the card issuer
> happens to notice you didn\'t pay one of your other bills - completely
> unrelated to your credit card - on time.
>
> At the end of April, Sen. Christopher J. Dodd (D., Conn.) introduced
> the Credit Card Accountability, Responsibility and Disclosure Act.
>
> I was especially interested in a few new items in Dodd\'s bill that
> the Fed didn\'t address:
>
> Require card companies to show account holders the total time and
> total expense they\'ll incur if they choose to pay only the minimum
> balance due each month. I would have liked it if this proposal went
> one step further: Show by how much both the time and total payment
> would decrease if the cardholder paid 1 percent, 2 percent and 3
> percent more than the minimum amount due each month. Showing those
> figures side by side with what happens if you pay just the minimum is
> motivation for paying more each month.
>
> Curtail credit-card companies from pushing credit-card offers on
> consumers under age 21. Under the new bill, these young adults would
> have to initiate contact with the card company to apply for a card.
>
> Suze Orman is a best-selling author and an Emmy Award-winning TV host.
> Contact her at [www.suzeorman.com](http://www.suzeorman.com/).

**Full article, from her website:**

Is Washington Finally Serious About Credit Card Reform?

In early May the Federal Reserve issued a series of new proposals
designed to curtail some of the more egregious credit card industry
practices, while also requiring card companies to better disclose their
rules to customers.\
\
As Federal Chairman Ben Bernanke stated, the proposed new regulations
are "intended to establish a new baseline for fairness in how credit
card plans operate. Consumers relying on credit cards should be better
able to predict how their decisions and actions will affect their
costs."\
\
**Amen.**\
\
Of course, the Fed's new proposed regs would have been a lot more
helpful if they came long before we got to our current national credit
card crunch: More than \$900 billion in outstanding card debt, much of
it accruing interest at rates well above 15% and susceptible to arcane
rules and practices that generate major fee revenue for the card
companies.

But I suppose we will have to be grateful for "better late, than never."
And the Fed's proposed rule changes do indeed offer some solid consumer
protections:

-   Credit card issuers will not be able to arbitrarily increase a the
    interest rate on your card. There would have to be a concrete reason
    for raising the rate, such as the cardholder to make a minimum
    payment by the due date, or a change in the underlying index used
    that is used to set the interest rate.

-   Speaking of due dates; statements will have to be mailed at least 21
    days before payment is due, rather than the current 14-day minimum.
    This is designed to make it less likely that credit card issuers can
    catch cardholders off guard by moving up a due date so the
    cardholder ends up making a late payment. At an average \$39 per
    late fee, it's easy to see why card companies have been happy to
    push customers into being late.

-   Card issuers would be prohibited from using your payments to only
    pay down your balances with the lowest interest rate. This practice
    has been a credit card company favorite: Lure new customers in with
    a low intro rate for a balance transfer, but then impose a high
    interest rate on new charges or cash advances. Then when the
    cardholder makes a payment, it is credited to the low-rate balance,
    rather than having any of the payment used to pay down the
    higher-rate debt. In other words, the card company just keeps
    charging you more and more on your growing high-rate debt. The new
    reg would require that at least a portion of every payment be
    credited to your high-rate debt.

-   The two-cycle billing system would be abolished. This practice, used
    by many card issuers, creates a higher balance due for cardholders
    who only have an unpaid balance from time to time.

**Congress Takes Hold of Card Problems**\
![](media/image1.png){width="2.9861111111111113e-2in"
height="0.12569444444444444in"}\
More action on credit card disclosure and practices may come from
Capitol Hill where two bills in the House and Senate are focused on
boosting consumer protections. Granted, this is just the sort of topic
that scores well in an election year; but let's cross our fingers and
hope this is more than vote-pandering.\
\
I was beginning to give up on Congress. A year ago it held hearings to
learn more about credit card billing practices. No legislation ever came
out of those hearings. The only small victory was that a few of the
major credit card issuers hauled before Congress to testify tried to
play nice by voluntarily rescinding their use of Universal Default.
That's the system whereby you can pay your credit card bill on time, yet
still see your interest rate skyrocket if the card issuer happened to
notice you didn't pay any of your other bills-completely unrelated to
your card company-on time. It looked like the credit card industry had
succeeded in throwing this one bone to Congress and consumers to avert
any more substantive changes to how the credit card industry is allowed
to operate.\
\
Then this past February, Representative Carolyn Maloney introduced the
Credit Cardholders' Bill of Rights Act of 2008. And then at the end of
April Senator Christopher Dodd introduced the Credit Card
Accountability, Responsibility and Disclosure Act (the C.A.R.D. Act).
These bills include some provisions that are echoed in the proposed Fed
regulations. Consumer advocates believe it important to build on the
Fed's regulations by having actual law in place that mandates consumer
protections. (Laws are harder to change than regulations.)\
\
I was especially interested in a few new items in the Senator's bill
that the Fed did not address.

-   Require card companies to show accountholders the total time and
    total expense they will incur if they choose to only pay the minimum
    balance due each month. I think putting those figures front and
    center would wake up a fair amount of people. I would have liked it
    if this proposal went one step further: show how much both the time
    and total payment would decrease if the cardholder paid 1%, 2% and
    3% more than the minimum amount due each month. Show those figures
    side by side with what happens if you pay just the minimum and you
    have an easy-to-see motivation for paying more each month.

-   Curtail credit card companies from proactively pushing credit card
    offers on consumers under the age of 21. Under the new bill, those
    young adults would have to initiate contact with the card company to
    apply for a card.

> Again, I encourage anyone who wants better disclosure of credit card
> fees and a push for a more level playing field to contact your
> Washington representatives and tell them what you think of both of
> these bills. This isn't just a matter of telling your representatives
> you are annoyed with something; you have specific bills you can refer
> to, and ask their position on. Wouldn't you like to know where your
> Representative and Senators stand on credit card reform?
>
> **San Gabriel Valley Tribune (California)**
>
> **\
> June 13, 2008 Friday**
>
> Fed\'s new **credit** rules make sense\
> \
> **SECTION:** OPINION\
> \
> **LENGTH:** 379 words
>
> CREDIT cards may be the most competitive business in America. Anyone
> with decent credit - and a lot of people without it - finds his
> mailbox stuffed with come-ons touting \"low introductory rates!\" and
> \"big rewards!\"
>
> That mailbox battle keeps prices down on the front end. But once
> you\'ve signed up, many credit card banks find lots of ways to ding
> you with higher interest charges.
>
> Federal bank regulators may put limits on those practices this summer,
> and it\'s about time.
>
> Among the tricks of the card trade is \"double-cycle\" billing, in
> which banks charge interest on debt you paid off a couple of weeks
> ago.
>
> They also can apply your payments to low-interest portions of your
> balance (such as money transferred from another credit card) while
> letting interest pile up on your high-interest debt.
>
> Then there\'s the old-standby of the credit card game: hiking the
> interest rate.
>
> Take a hit on your credit score or make a late payment, and up go your
> interest charges. The average \"penalty\" interest rate last year was
> 25 percent.
>
> Not all banks practice such strategies, but enough do to prompt a low
> rumbling in Congress about the need for reform.
>
> This month, the Federal Reserve and other bank regulators proposed
> rules to end several abusive practices. The rules would take effect
> this summer unless regulators decide to change them after hearing
> public comments.
>
> Gone would be double-cycle billing and the practice of allocating
> payments to low-interest debt. Fees would be limited on cards offered
> to people with bad credit.
>
> But on the biggest issue - whether card companies should be allowed to
> continue hiking interest rates when credit scores fall - regulators
> split the difference. The Fed will allow higher rates on new debt, but
> not on existing balances.
>
> That gives customers an easy option if they don\'t want to pay the
> higher rates: They simply can stop using the credit card.
>
> Banks still would be able to raise rates on existing balances if a
> customer is 30 days late on a payment for that bank\'s card.
>
> The Fed\'s willingness to tighten credit card rules is a good sign.
>
> The mortgage industry is in crisis in part because regulators sat back
> and watched as consumers buried themselves in debt they couldn\'t
> repay. Regulators may have learned their lesson.

**Sun-Sentinel (Fort Lauderdale, Florida)**

**\
June 3, 2008 Tuesday\
Broward Metro Edition**

**SECTION:** OPED; Pg. 11A\
\
**LENGTH:** 725 words\
\
**HEADLINE:** SAVE BUNDLES BY GIVING UP PLASTIC FOR CASH\
\
**BYLINE:** James L. Martin\
\
**BODY:**\
\
\
The Federal Reserve just put forward a plan to clamp down on unfair and
deceptive practices in the credit card industry.\
\
This is good news for consumers, and certainly for seniors, often
budget-squeezed and on fixed incomes. In recent years, lenders have
devised increasingly devious ways of bilking cardholders out of their
money, like raising interest rates on old debt and shortening billing
cycles. The Fed\'s proposals would go a long way to restrict these kinds
of abuses. But no amount of regulatory intervention will completely
solve the country\'s credit problems. A full turnaround requires that
individual Americans take responsibility for their own financial
well-being. And one of the best ways is to use cash.\
\
Relying on dollars makes it much easier to stick to a budget. You don\'t
spend money that you don\'t have. Minor expenses won\'t ever balloon
into crushing debt.\
\
With credit cards, it\'s the exact opposite. Credit card companies want
people to build debt. And they structure payment requirements to achieve
that goal - the average monthly minimum has dropped to just 2 to 2.5
percent. Even worse, they often raise interest rates arbitrarily.
Customers wind up taking on debt thinking it will cost them
significantly less than it actually does.\
\
At a recent congressional hearing, one man recounted how his card
provider had increased his rate by 6 percent, and then informed him of
the change with only a \"small, loose billing insert.\" He went on to
describe the change as \"unilateral,\" and said that \"no reason or
explanation was given.\"\
\
Of course, American consumers, and all too many senior citizens, have
willingly taken the bait. The median amount of credit card debt is over
\$6,500, according to a 2007 survey from CardTrak.com. Less than a third
of cardholders pay their balances when they\'re supposed to.\
\
The Consumer Federation of America recently reported that the total
amount of credit card debt nationally is around \$850 billion, up
four-fold from 1990. The average debt for families that don\'t pay off
their balances each month is \$17,000.\
\
Unfortunately, America\'s love affair with credit cards shows no signs
of waning. And more and more people are pulling out the plastic for
minor expenses, like their daily cup of coffee and their lunchtime
turkey sandwich. As Christopher Mammone, an analyst at [Deutsche Bank
AG,  ![](media/image2.png){width="7.152777777777777e-2in"
height="4.1666666666666664e-2in"}](javascript:void 0)explained, \"The
consumer\...continues to move an even greater portion of their everyday
purchases onto cards.\"\
\
Swiping your card at Starbucks every morning is bad economics - for both
consumers and merchants. For consumers, it amounts to taking out a
single-digit loan that could easily morph into a triple-digit debt
within a year.\
\
Meanwhile, merchants suffer because they have to pay a fee to the
credit-card company every time a purchase is made with plastic. By law,
merchants are barred from recouping this cost by charging more for
charge-card purchases. So prices go up for everyone - and ultimately
cash users end up subsidizing credit-card users.\
\
This year alone, credit card companies will make at least \$30 billion
in these fees. That\'s a hidden tax that takes billions of dollars
directly out of consumers\' pockets.\
\
Credit card companies make even more money when their users are
financially irresponsible. So it\'s no wonder that while most of the
economy is in a nosedive, they\'ve been flying high. Visa\'s profits
rose 28 percent last quarter. MasterCard\'s stock price has increased
520 percent since the company went public in 2006.\
\
The best way to avoid debt is simply not to take it on in the first
place. That\'s why using cash as often as possible is such a good idea.\
\
It makes it much easier to stay on budget and track personal finances.
It\'s a great deal more convenient - businesses don\'t post \"Credit
Cards Only\" signs. Even more importantly, once you make a purchase with
cash, it\'s over. You\'ll never get stuck with a giant bill at the end
of the month.\
\
Little by little, Americans have been building up debt that will haunt
them for a lifetime. It\'s good to see that regulators have finally
drummed up the political courage necessary to take on the credit card
industry. But to fully right the ship, people need to take control of
their own finances - and that means returning to the good old greenback.

**The Boston Globe**

**May 31, 3008 Saturday**

GLOBE EDITORIAL

# Credit where it\'s overdue

May 31, 2008

REGULATORS AND elected officials are starting to circle the credit card
companies, and not a moment too soon. The Federal Reserve reports that
credit card debt rose more than 7 percent last month, on top of the
already burdensome average of \$8,000 per family. Credit and debit card
delinquencies are at their highest levels in 18 years. And all the while
credit card companies are employing practices that only dig consumers
deeper into the hole.

The Federal Reserve, stung by charges that it didn\'t move quickly
enough to head off the subprime mortgage crisis, this month proposed new
regulations to protect consumers from usurious and inexplicable fees and
interest rates. Among other things, the new rules would forbid companies
from raising rates on existing credit card balances; allow consumers a
reasonable amount of time to pay their bills before slapping on late
fees; and force banks to apply payments to higher-rate balances first.

The Fed\'s moves complement several congressional efforts, though some
bills go further to protect consumers. Representative Carolyn Maloney of
New York proposes modest reforms to bar credit card companies from
raising interest rates on outstanding balances because of bad credit
reports or unpaid bills to other creditors. She would give cardholders
45 days\' notice of any rate increases. Senators Chris Dodd of
Connecticut and Robert Menendez of New Jersey have separate bills that
cap the interest rate hikes companies can assess for an unpaid bill at 7
percent above the previous rate, and allow consumers under age 21 to opt
out of the relentless credit come-ons in the mail.

The American Banking Association, the credit card trade association,
opposes more regulation and longs for the good old days, when
\"disclosure\" in the fine print of credit card applications was
considered protection enough. The ABA says that more restrictions will
limit choices for consumers and make it harder to offer certain credit
\"products.\"

This wouldn\'t be so terrible; Americans are overextended enough without
ever more exotic offers to add to their debt. And yes, people need to
take some personal responsibility for living beyond their means. But
\"caveat emptor\" isn\'t good enough, not when the credit companies
change the rules - and interest rates - in the middle of the game. Not
everyone with a crushing debt load blew it all on big screen TVs or
vacations they can\'t afford.

It\'s not certain that the rising debt and defaults among credit card
holders will cascade the way home mortgage losses did and undermine the
whole industry. But Washington shouldn\'t wait for a catastrophe to call
the game. Credit card companies have tilted the board for too
long. ![](media/image3.png){width="6.25e-2in"
height="8.333333333333333e-2in"}

**The Herald (SC)**

> **May 20, 2008**
>
> Earlier this month, the Federal Reserve proposed new rules for the
> credit card industry to restore something that had been severely
> lacking in the way lenders conduct business: fairness.
>
> If enacted, the regulations would be the most sweeping change in
> decades, offering consumers more protection against late fees and
> preventing lenders from making credit card offers that regulators say
> are deceptive. The new rules would ban common practices such as
> \"double cycle billing\" and arbitrary interest hikes.
>
> Millions of Americans are buried up to their necks in credit card
> debt. To some extent, of course, this can be attributed borrowers\'
> lack of self-discipline. But in many cases, the problem is magnified
> by the policies of the lenders.
>
> For example, in double cycle billing, lenders calculate one month of
> fees based on two previous months\' worth of activity on an account.
> Lenders also would be prohibited from arbitrarily raising interest
> rates on any debt unless a promotional rate expires or the borrower is
> more than a month late making payments.
>
> The credit card industry once faced greater controls, but when
> interest rates rose sharply in the 1970s, banks lobbied for a
> relaxation of the rules, claiming they hurt profits and reduced the
> credit. Congress went along, and the industry gradually adopted the
> practices in place today.
>
> But since the Democrats took control of Congress last year, lawmakers
> have begun to take a new look at the industry. Sen. Christopher Dodd,
> D-Conn., introduced a measure this month to curb credit card abuse,
> and Rep. Carolyn Maloney, D-N.Y., chair of the House Financial
> Institutions and Consumer Credit Subcommittee, has introduced what she
> calls the Credit Cardholders\' Bill of Rights.
>
> While congressional reformers praise the Fed for its proposed
> regulations, they note that many of the final versions of the changes,
> if approved, won\'t go into effect until next year. The rules also
> might be watered down, as lobbyists for lenders exert pressure on the
> Fed. The American Banking Association already has called the rules a
> \"regulatory intrusion\" into the market.
>
> While we agree that the Fed\'s efforts are commendable, Congress needs
> to act now rather than wait for the Fed to change the rules. By the
> time the Fed finalizes its regulations, millions more cardholders
> could be buried in debt with no way to dig themselves out.
>
> Lenders have far too free a hand in adopting unscrupulous policies
> that prey on borrowers, often without fully informing them of changing
> credit rates. Congress has a responsibility to rein in the industry
> and protect consumers, and we hope lawmakers will stand up to the
> banking lobby for the financial welfare of credit card holders and the
> nation as a whole.
>
> **Buffalo News (New York)**
>
> **\
> May 16, 2008 Friday\
> CENTRAL EDITION**
>
> Ease consumer credit risks;\
> End abuses in card fees and charges and add fairness to monthly bills\
> \
> **SECTION:** EDITORIAL PAGE; Pg. A8\
> \
> **LENGTH:** 385 words
>
> Federal banking regulators deserve some thanks for a \"better than
> late\" proposal in which initial rules will curb some abusive credit
> card lending practices. But, as consumer groups have urged, Congress
> should provide additional protections not yet proposed by the
> regulators.
>
> The current proposal by the Federal Reserve Board, the Office of
> Thrift Supervision and the National Credit Union Administration would
> halt many unjustified interest rate hikes on existing balances,
> prohibiting the charging of interest on debt already paid off and
> requiring issuers to allocate cardholder payments more fairly.
>
> Under this measure, regulations would:
>
> \*Prohibit the widespread practice of charging higher interest rates
> on balances incurred before a rate increase went into effect, unless
> the cardholder is more than 30 days late in paying his or her credit
> card bill.
>
> \*Require credit card issuers more fairly to apply payments to
> balances with different interest rates, and when consumers transfer
> balances with low short-term \"teaser\" rates, issuers would be
> required to apply payments first to higher-rate debt. And for
> consumers who take out cash advances that have higher interest rates,
> credit card companies would have to apply part \-- but not all \-- of
> the payment above the minimum amount to the higher-rate debt.
>
> \*Forbid \"double cycle billing,\" which results in cardholders paying
> interest on debt paid off the previous month during the grace period.
>
> \*Forbid credit card companies that target consumers with poor credit
> histories from charging fees that amount to more than half of the
> credit being offered. If the fees being charged to use the card amount
> to more than one quarter of the credit line, cardholders would be
> allowed to pay these fees off over a one-year period.
>
> The nation\'s economy is on the verge of a recession, if not already
> there by some accounts. There\'s very little chance Americans can dig
> themselves up out of credit card debt without regulators \-- and
> Congress \-- offering protections.
>
> Congress now needs to pick up the ball and keep moving.
>
> As the Consumer Federation of America has stated, Congress should
> enact a permanent law that curbs abusive practices not addressed in
> the proposal. It would be a start to real reform and recovery, not to
> mention relief to countless struggling Americans.

**Staten Island Advance**

**May 15, 2008**

# Boom in plastic 

Thursday, May 15, 2008

Three out of four American families use credit cards. Most of them
don\'t pay their balances in full every month. Many pay only the minimum
amount due.

So Staten Islanders have an enormous stake in the consumer credit
crunch, a problem made even worse lately by the rising costs of food and
gasoline.

Now an increasing number of credit card firms and debt collection
companies are going after Islanders in Civil Court. There, nearly 100
cases each week are related to problems with credit.

But far more people \-- those who don\'t face anywhere near such a
crisis \-- feel the credit card pinch.

As banks have tightened rules for home equity loans in the face of the
deepening mortgage squeeze, consumers have put more of their purchases
on credit cards, a boom in plastic that has lenders cashing in.

Enough, says the Federal Reserve.

The Fed and two other agencies have proposed new regulations to make the
cost of such credit more stable and predictable. Congress is looking
into the issue, too.

Let\'s hope such reforms take effect.

Credit card debt has soared to about \$850 billion, or four times what
it was in 1990. The average debt for the 58 percent of households that
don\'t pay in full each month is about \$17,000, a real burden in hard
times.

In a sign that Americans are relying more on their credit cards, the
total for revolving credit has grown in 2008 significantly faster than
fixed-rate debt.

During the past year, revolving debt has risen nearly \$6 billion per
month, or almost 8 percent \-- one of the fastest growth rates since
2001.

Enter, the Fed. Plus the Office of Thrift Supervision and the National
Credit Union Administration, which back similar new rules.

The Federal Reserve has found that nearly two thirds of banks surveyed
have tightened lending standards on home mortgages. Tougher rules are
also being applied to other consumer debt such as credit cards.

Exorbitant fees and usurious interest rates are being targeted by
reformers hoping to offer relief.

Among other things, the Fed plan would prevent banks from charging for
late payments unless consumers are given about three weeks to make them.

In the past 12 years, penalty fees for late payments have more than
doubled \-- from an average of \$13 in 1995 to \$28 now. Make just one
late payment and you can face a penalty interest rate of more than 30
percent.

The Fed also wants banks to split payments by consumers more fairly
between purchases and cash advances, not just apply them to low-rate
balances.

Credit-card lenders would also be restricted in their ability to raise
rates on existing balances based other financial problems a consumer
might run into.

With 6,000 institutions making money by offering credit cards, harsh,
unfair or even deceptive practices have tended to proliferate.

For example, the fine print in most disclosure statements say that
issuers can change the terms of the cardholder\'s agreement at any time
for any reason.

\"There is no other contract in the world that can change its terms at
any time,\" notes Ruth Susswein of the watchdog group Consumer Action.

Disclosure by itself isn\'t enough, of course.

Nor are the Fed\'s reforms, despite the expected opposition by the
American Bankers Association.

\"The Federal Reserve\'s proposal is an unprecedented regulatory
intrusion into marketplace pricing and product offerings,\" claims
Edward L. Yingling, chief executive of the ABA. \"We are deeply
concerned that these rules will result in less competition, higher
consumer prices, fewer consumer choices and reduced consumer access to
credit cards.\"

They are also deeply concerned about profits following big losses in
mortgage lending.

The common-sense and welcome rules put forth by the Fed on credit cards
are due to go into effect by the end of the year. Moreover, they should
be enacted by Congress and given the weight of law.

**Knoxville News-Sentinel (TN)**

**May 12, 2008**

# Holding the cards 

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The Bush administration has been notoriously regulation-averse, but the
subprime-mortgage crisis seems to have taught the administration that it
can\'t sit on the sidelines with unhealthy business practices out of
control.

Thus, Federal Reserve Board Chairman Ben Bernanke has proposed new
regulations for the credit card industry \"intended to establish a new
baseline for fairness in how credit card plans operate.\"

Credit card companies have had a generally free hand. Credit cards are
essential to modern commerce; they really are electronic cash. But
between consumer and company, it\'s hardly a level playing field. The
cards are easily obtained and come with tiny print that only a lawyer
could plow through.

The proposed regulations should curb some of the more egregious unfair
practices and stave off stricter regulation.

Among the proposals that could become binding by the start of the year:

\-- Lenders could not unilaterally raise interest rates on a cardholder
because the borrower has a problem with another lender.

\-- Nor could lenders allocate payments to balances with the lowest
rates so the cardholder continues to pay on balances with higher rates.

\-- The borrower must be given a reasonable amount of time before a
payment is deemed late, and the lender could not retroactively raise
interest rates on pre-existing balances.

None of this sounds particularly onerous, but a spokesman for the
banking industry fretted that \"regulatory intervention\" would result
in higher rates and less credit.

Another way to look at it is this: It\'s too bad Bush came to see the
benefits of warranted regulation so late in his administration.

[![](media/image10.png){width="0.4270833333333333in"
height="0.4270833333333333in"}](http://www.scripps.com/)

**The Columbus Dispatch (OH)**

**May 10, 2008**

Credit-card reform

Proposed regulations on lending practices would benefit consumers

Saturday,  May 10, 2008 3:02 AM

*M*any Americans have nobody but themselves to blame for their
credit-card misery. But others who play by the rules and make their
payments on time still get dinged with unexpected fees and interest-rate
increases by credit-card issuers.

Because some extra costs are buried in the fine print, consumers might
be caught by surprise by these charges.

Proposed federal regulations should help. If approved after a 75-day
public-comment period, the rules will go into effect at the end of the
year.

The plan is intended to set \"a new base line for fairness,\" according
to Federal Reserve Board Chairman Ben Bernanke.

The Federal Reserve, the National Credit Union Association and the
Office of Thrift Supervision unveiled on May 2 the most-substantial
reforms in years in how credit-card businesses operate.

Lenders would be required to give borrowers at least 21 days after
receiving their bills to pay. Lenders also would be banned from
arbitrarily raising interest rates and barred from \"double-cycle
billing,\" in which lenders base one month\'s fees on two months of
account activity.

Also, the companies would be prevented from making deceptive offers for
credit cards and barred from directing payments toward the
lower-interest portion of a bill first, allowing the higher-interest
balance to build up.

The plan would end the common practice of increasing interest rates for
cardholders who pay their bills on time but experience a decrease in
their credit scores for other reasons.

Americans are drowning in debt. Confusing credit-card terms, unfair late
fees and hidden rate increases exacerbate the problem.

Congress also is studying this issue and could crack down even harder on
the credit-card business. The reforms are overdue.

**The St. Petersburg Times (FL)**

**May 10, 2008**

# Reforms past due for credit card abuses

Published Friday, May 9, 2008 6:04 PM

Many Americans are walking around with ticking time bombs in their
pockets --- in fact, the bombs have already exploded in many cases. Not
real bombs, but credit cards that are near their borrowing limits or in
default. The Federal Reserve has taken the first step in defusing that
threat to individual consumers and the overall economy.

The Fed, under Chairman Ben Bernanke, is proposing a number of reforms
that would curb the predatory excesses of some credit card issuers.
Relief can\'t come too soon.

Americans owe more than \$800-billion in credit card debt, and more than
1 in 3 cardholders is unable to make timely payment on accumulated
balances. That means lenders tack on more fees, causing a snowball
effect that pushes more borrowers toward default. Target stores wrote
off more than \$55-million in credit card debt just in March, and even
stalwart American Express reported a 6 percent decline in profits tied
to card defaults.

What is troublesome for banks can be tragic for families. With falling
home values, stagnant wages and rising prices for basics such as food
and fuel, Americans are relying more on credit cards to pay for
necessities. Some lenders have taken advantage of that situation by
bumping up fees and interest rates on credit cards, even for those who
pay on time.

Rules proposed by the Fed would stop some of the worst abuses. Among the
protections: Card-issuing banks would be prohibited from increasing the
interest rate on existing balances without full and clear disclosure,
and then only if a teaser rate expires or payments are more than 30 days
late. Banks would have to allow a reasonable grace period for payments
without fees and be prohibited from applying payments in such a way as
to increase interest charges.

Banks commonly offer a low initial interest rate and apply payments to
the balance subject to that rate while allowing the amount carried over
to accrue at a higher interest rate. That would no longer be allowed.

Predictably, the banking industry opposes such reform, with the American
Bankers Association calling it \"an unprecedented regulatory intrusion
into marketplace pricing and product offerings.\"

Fine. Somebody needs to regulate a marketplace that is out of control,
takes advantage of the most naive and vulnerable consumers and is
threatening an already fragile economy.

**The Daily and Sunday Review (PA)**

**May 10, 2008**

**More vigorous regulation needed for credit cards**

The Bush administration and Congress seem to think consumer spending is
the key to enlivening the moribund economy. That's why they authorized
"stimulus" tax rebates that soon will be in the mail.

If consumers are the answer, though, other aspects of the federal
government haven't been asking enough questions in their behalf.

Although the Federal Reserve has moved aggressively to shore up major
financial institutions that are at risk due to shaky mortgage
portfolios, until Friday it had done little to help those beleaguered
consumers stabilize their long-term financial situations.\
\
Last week, the Fed's Board of Governors decided to chip lightly at the
usury that characterizes too much of the nation's credit card lending.
The Fed decided to use its regulatory authority to crack down on the
most egregious practices employed by some card issuers to drive up their
profits while keeping their customers mired deeply in debt.\
\
According to the Consumer Federation of America, Americans now have more
than \$850 billion in credit card debt. That figure is rapidly climbing
due, in part, to the practices of card issuers who add major fees to
interest, arbitrarily increase interest rates, and heavily penalize
consumers for a broad array of circumstances.\
\
The Fed plans to preclude arbitrary rate increases, penalty rates that
stem from issues that are not the consumers' fault, unfair time
constraints on payments and so on.\
\
The banking industry plans to oppose the rules, claiming that they would
result in restricted credit and characterizing them as unfair government
intervention in the markets.\
\
Intervention, however, is necessary if Americans under the thumb of the
credit card industry are to have any hope of solvency. And even though
the Fed's proposals are welcome, they should not supplant far broader
relief envisioned in a bill sponsored by Rep. Carolyn Maloney of New
York.\
\
Loosening the stranglehold of the credit card history is a long-term
form of consumer stimulus that could help the economy for the long term.
Neither the Fed nor Congress should back away from the task.

> **The Lebanon Daily News (Pennsylvania)**
>
> **\
> May 9, 2008 Friday**
>
> Sense at last\
> \
> **BYLINE:** Lebanon Daily News\
> \
> **SECTION:** EDITORIALS\
> \
> **LENGTH:** 305 words
>
> The Federal Reserve has proposed new rules to limit the ways banks can
> jack consumers around with credit-card interest, fees and late-payment
> penalties.
>
> About time.
>
> \"The proposed rules are intended to establish a new baseline for
> fairness in how credit-card plans operate,\" said Fed Chairman Ben
> Bernanke. Implicit in that statement is that the existing \"baseline\"
> is unfair.
>
> \"Consumers relying on credit cards should be better able to predict
> how their decisions and actions will affect their costs.\"
>
> Gee, ya think?
>
> The Fed\'s descriptions of its new regulatory proposals, taken from
> its news release, gives a flavor for what banks have been doing.
>
> \"Mailed credit-card payments received by 5 p.m.. on the due date must
> be considered timely.\" (Apparently, that\'s often not bank policy.)
>
> \"When different annual percentage rates apply to different balances
> on a credit-card account (for example purchases and cash advances),
> banks would have to allocate payments exceeding the minimum payment
> using one of three methods or a method equally beneficial to
> consumers. They could not allocate the entire amount to the balance
> with the lowest rate.\"
>
> \"Banks would be prohibited from increasing the rate on a pre-existing
> credit-card balance (except under limited circumstances) and must
> allow the consumer to pay off that balance over a reasonable period of
> time.\"
>
> But here\'s our favorite:
>
> \"The proposal would address concerns regarding subprime credit cards
> by prohibiting banks from financing security deposits and fees for
> credit availability (such as account-opening fees or membership fees)
> if charges assessed during the first 12 months would exceed 50 percent
> of the initial credit limit.\"
>
> We\'ve read about how subprime mortgage lending was just the tip of a
> financial iceberg that includes subprime credit-card lending. Now we
> see why.
>
> **Asbury Park Press (New Jersey)**
>
> **\
> May 9, 2008 Friday**
>
> Credit card reform overdue\
> \
> **BYLINE:** Asbury Park Press editorial\
> \
> **SECTION:** EDITORIALS\
> \
> **LENGTH:** 300 words
>
> Federal financial regulators proposed steps last week to clamp down on
> deceptive lenders. It\'s about time.
>
> The Federal Reserve Board approved rule changes that would prevent
> credit card companies from arbitrarily raising interest rates, give
> borrowers a more reasonable period of time to pay their bills and
> prohibit lenders from allocating all payments only to balances with
> lower interest rates when a borrower has balances with higher rates.
> If the new rules withstand challenges from the banking industry, they
> could be finalized by the end of the year.
>
> Federal Reserve Chairman [Ben
> Bernanke](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T4157806248&returnToId=20_T4157823553&csi=260728&A=0.4952776189014152&sourceCSI=9369&indexTerm=%23PE0009XOS%23&searchTerm=Ben Bernanke &indexType=P)
> Ben Bernanke  -Search using:
> ![](media/image11.png){width="0.14583333333333334in"
> height="0.14583333333333334in"}[Biographies Plus
> News](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T4157806248&returnToId=20_T4157823553&csi=260728&A=0.4952776189014152&sourceCSI=9369&indexTerm=%23PE0009XOS%23&searchTerm=Ben Bernanke &indexType=P)

![](media/image11.png){width="0.14583333333333334in"
height="0.14583333333333334in"}[News, Most Recent 60
Days](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T4157806248&returnToId=20_T4157823553&csi=260728&A=0.4952776189014152&sourceCSI=162599&indexTerm=%23PE0009XOS%23&searchTerm=Ben Bernanke &indexType=P)

> said the rules should establish a \"baseline for fairness,\" and
> consumers using credit cards \"should be better able to predict how
> their decisions and actions will affect their costs.\" That baseline
> should have been established long ago. It\'s unfortunate the
> anti-consumer elements of the rules weren\'t addressed 2 1/2 years ago
> when Congress enacted the Bankruptcy Abuse Prevention and Consumer
> Protection Act, which makes it almost impossible for the average
> person to discharge debt. Specifics of
> [Bernanke![](media/image11.png){width="0.14583333333333334in"
> height="0.14583333333333334in"}](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T4157806248&returnToId=20_T4157823553&csi=260728&A=0.4952776189014152&sourceCSI=9369&indexTerm=%23PE0009XOS%23&searchTerm=Bernanke&indexType=P)[News,
> Most Recent 60
> Days](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T4157806248&returnToId=20_T4157823553&csi=260728&A=0.4952776189014152&sourceCSI=162599&indexTerm=%23PE0009XOS%23&searchTerm=Bernanke&indexType=P)\'s
> plans remain imprecise, so no one should get excited yet. For example,
> a suggestion of what might be a \"reasonable period\" in which to make
> payments was suggested at 21 days. What\'s wrong with the traditional
> 30 days in the business world? And the mere fact [Bernanke
> ![](media/image11.png){width="0.14583333333333334in"
> height="0.14583333333333334in"}Biographies Plus
> News](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T4157806248&returnToId=20_T4157823553&csi=260728&A=0.4952776189014152&sourceCSI=9369&indexTerm=%23PE0009XOS%23&searchTerm=Bernanke &indexType=P)
> ![](media/image11.png){width="0.14583333333333334in"
> height="0.14583333333333334in"}News, Most Recent 60 Dayshas to enact
> no-brainers, such as banning retroactive interest rate increases on
> pre-existing balances, makes the U.S. look like a banana republic.
> Sen. Robert Menendez, D-N.J., is sponsoring legislation to address
> some of the same credit card abuse issues [Bernanke
> ![](media/image11.png){width="0.13472222222222222in"
> height="0.13472222222222222in"}](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T4157806248&returnToId=20_T4157823553&csi=260728&A=0.4952776189014152&sourceCSI=9369&indexTerm=%23PE0009XOS%23&searchTerm=Bernanke &indexType=P)[News,
> Most Recent 60
> Days](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T4157806248&returnToId=20_T4157823553&csi=260728&A=0.4952776189014152&sourceCSI=162599&indexTerm=%23PE0009XOS%23&searchTerm=Bernanke &indexType=P)seeks
> to correct administratively. Both initiatives deserve support. But a
> congressional remedy may prove a stronger antidote to lender gouging
> of vulnerable borrowers.

**Newsday (NY)**

**May 9, 2008**

**HEADLINE:** Credit crunched?;\
It\'s a good time for Congress\' proposal to protect cardholders from
bank greed\
\
**BODY:**\
\
\
Got a credit card? If so, this one\'s for you. Washington wants to
curtail some of the more insidious ways that banks dip into your pocket
in exchange for allowing you to buy now and pay later. With the economy
slowing, new rules to rein in unfair, deceptive credit practices would
provide a bit of welcome relief for consumers burdened by debt.\
\
Ever had the interest rate suddenly go up on your existing card balances
for no readily apparent reason? Or had the interest rate soar on a card
that you\'ve never once paid late, only to be told it\'s due to a late
payment on some other, unrelated account?\
\
Have you noticed that credit card payments are often applied to the
portion of your outstanding debt with the lowest interest rate, leaving
higher interest debt to pump up the bank\'s take?\
\
Those practices and more would be limited by the Credit Cardholders\'
Bill of Rights, sponsored by Rep. Carolyn Maloney (D-Manhattan). Similar
legislation is pending in the Senate. The Federal Reserve weighed in
last week with similar rules it wants to impose administratively. But
administrative rules can be easily changed or eliminated. These
protections should be given the force of statute.\
\
The American Bankers Association sees things differently. It said the
new restrictions would make credit cards harder to get and drive up the
cost of credit. And if consumers don\'t like one card\'s policies, they
can take their business to any one of the 6,000 institutions that offer
credit cards.\
\
But arbitrary interest-rate hikes and hidden fees already cost consumers
plenty. Maloney\'s bill would make the cost of credit more predictable
and stable - a big plus for the three in four American families that use
credit cards.

**The Charleston Gazette (W. VA)**

**May 7, 2008**

**Plastic money**

**Credit card ripoffs**

HAS a credit card company bill ever hiked your interest rate without
warning, say from 5 percent to 12 percent? Or 12 percent to 19 percent?
Have you ever been slapped with late fees before you had even 20 days to
pay? Ever been charged hidden security fees?

HAS a credit card company bill ever hiked your interest rate without
warning, say from 5 percent to 12 percent? Or 12 percent to 19 percent?
Have you ever been slapped with late fees before you had even 20 days to
pay? Ever been charged hidden security fees?

The Federal Reserve has proposed new rules to halt a laundry list of
such greedy, deceptive practices. Credit card companies and banks would
no longer be allowed to advertise one interest rate, then apply a higher
rate to payments. They could not charge undisclosed security costs or
multiple fees for a late payment.

However, the rules aren\'t a done deal. They are proposed amendments to
U.S. Truth in Lending regulations, not final. After a 75-day comment
period, regulators will ponder final rules, to be published around the
end of the year, they say.

This gives credit industry lobbyists seven to nine months to try to
water down or deep-six the proposed reforms. Billions are at stake, and
the pressure is on.

America\'s economy is teetering, and millions of families are
floundering in credit card debt. A rising number are defaulting.

Yes, too many accepted cards they could not afford and charged more than
they earn. As the old saying goes: \"It is easier to sign a note than to
pay it.\" The government can\'t make individuals behave responsibly with
their credit cards. But it can force the credit industry to behave in an
ethical, predictable way, without raking off hidden fees or charging
bait-and-switch interest rates.

For the sake of West Virginia families, our congressional delegation
must keep the heat on the regulators to resist the credit card company
lobbyists and issue the regulations as proposed.

> **San Gabriel Valley Tribune (California)**
>
> **\
> May 7, 2008 Wednesday**
>
> **High interest** in **credit**\
> \
> **SECTION:** OPINION\
> \
> **LENGTH:** 345 words
>
> THE Federal Reserve Board has a bead on credit-card industry practices
> that blindside consumers already strapped by job losses, high medical
> bills and mortgage troubles.
>
> Consumers are being hit hard enough to offend the sensibilities of a
> conservative Republican presidential administration that through two
> terms has been loath to use the regulatory powers of government. Until
> now.
>
> \"The proposed rules are intended to establish a new baseline for
> fairness in how credit-card plans operate,\" Federal Reserve Chairman
> Ben Bernanke said. He wants consumers to be able to predict how card
> use and borrowing will affect their costs.
>
> A hard look by regulators is long overdue. Lenders - banks, credit
> unions and savings-and-loans - pretty well got what they wanted in
> 2005 when bankruptcy rules were tightened. The collapse of the housing
> market because of the lack of disclosure and just plain fraud by
> mortgage bankers has brought other lending practices into the
> sunlight.
>
> The credit-card industry relentlessly trolls for new customers with
> unsolicited offers and come-ons. Lurking in the background is a
> thicket of fees, billing procedures, surcharges and penalties for a
> myriad of infractions.
>
> The Fed wants consumers to have a fair time to make payments instead
> of being jammed with tight due dates. Payments that arrive by 5 p.m.
> on the due date, or on a holiday, cannot be considered late. Who knew
> they were?
>
> Banks are infamous, according to the Fed, for playing lucrative games
> with interest rates. New, higher rates get applied to existing
> balances. Payments are parsed out so the most expensive debt with the
> highest interest rate is paid last.
>
> Another target is two-cycle billing that manipulates interest and
> balance calculations. The Federal Reserve is also going after a
> variety of fees and deposit requirements most consumers never knew or
> imagined existed.
>
> Credit-card lenders rode high for years. They got greedy and they got
> caught.
>
> If the Federal Reserve Board is not lobbied into paralysis, the new
> credit-card rules could be in place by Jan. 1.

HAS a credit card company bill ever hiked your interest rate without
warning, say from 5 percent to 12 percent? Or 12 percent to 19 percent?
Have you ever been slapped with late fees before you had even 20 days to
pay? Ever been charged hidden security fees?

The Federal Reserve has proposed new rules to halt a laundry list of
such greedy, deceptive practices. Credit card companies and banks would
no longer be allowed to advertise one interest rate, then apply a higher
rate to payments. They could not charge undisclosed security costs or
multiple fees for a late payment.

However, the rules aren\'t a done deal. They are proposed amendments to
U.S. Truth in Lending regulations, not final. After a 75-day comment
period, regulators will ponder final rules, to be published around the
end of the year, they say.

This gives credit industry lobbyists seven to nine months to try to
water down or deep-six the proposed reforms. Billions are at stake, and
the pressure is on.

America\'s economy is teetering, and millions of families are
floundering in credit card debt. A rising number are defaulting.

Yes, too many accepted cards they could not afford and charged more than
they earn. As the old saying goes: \"It is easier to sign a note than to
pay it.\" The government can\'t make individuals behave responsibly with
their credit cards. But it can force the credit industry to behave in an
ethical, predictable way, without raking off hidden fees or charging
bait-and-switch interest rates.

For the sake of West Virginia families, our congressional delegation
must keep the heat on the regulators to resist the credit card company
lobbyists and issue the regulations as proposed.

**The Dallas Morning News**

**May 7, 2008**

## Editorial: Credit card regulation is overdue 

##### 06:37 AM CDT on Wednesday, May 7, 2008

For years, credit card companies have orchestrated due dates and payment
postings to generate late penalties and fees -- all in the name of extra
profits. Enough is enough.

This newspaper was glad to see the report last week that three major
financial regulators, including the Federal Reserve, have proposed rules
to curb deceptive credit card practices. Separately, Congress also is
considering measures.

New regulation is overdue. Creditors have been free to hike interest
rates at any time and for any reason -- and then apply the new rate to
purchases the consumer has already made. Credit issuers also have
manufactured revenue by selectively posting payments to maximize
interest charges.

They\'ve also been allowed to impose finance charges based on balances
that their customers owed during the previous two billing cycles. This
maneuver allowed credit card issuers to charge interest for debt paid on
time during a previous grace period. It\'s all legal -- but ethically
questionable.

The credit card industry already is fighting back against new
regulation. Some card issuers characterize the proposals as price
controls and unwarranted intrusions into free-market transactions. Some
say consumers can change card companies or pay off their debt each month
to avoid charges.

There is more than a shred of hypocrisy in these responses. It\'s hard
to take seriously the complaints of an industry that cavalierly pushes
credit cards to virtually any person with a pulse.

Moreover, there\'s a huge difference between charging cardholders who
have missed payments and willfully creating a system to generate
unnecessary penalties. People who pay late deserve to pay higher rates
and fees. However, tricking customers who carry a balance into paying
dubious fees and penalties is unethical.

These proposals still have to survive the political gantlet of industry
lobbyists who will try to water down or kill them. The credit
companies\' \"the sky is falling\" scenarios signal just how out of
touch they are with fairness. We hope the regulators have the willpower
to acquaint them with that word. Fed\'s proposed changes

•Credit card holders must have a reasonable amount of time to make
payments.

•Banks would be prohibited from computing interest on balances across
two billing cycles.

•Banks would be prohibited from increasing the rate on most pre-existing
balances and must allow consumers to pay off their balance over a
reasonable period.

•Banks must apply payments to higher-rate balances first and would be
prohibited from applying payments to increase consumer interest charges.

**The Baltimore Sun**

**May 6, 2008**

## Credit card crackdown

### Our view: New federal rules could help ease debt burden

May 6, 2008

When cash runs short and bills mount, a credit card can be both the
answer and part of the problem. Proposed new rules by federal banking
regulators to help consumers navigate the too-often-arbitrary world of
credit cards are an overdue, but welcome, response to the
vulnerabilities of paying with plastic.\
\
Amid a severe mortgage crisis and credit crunch, the rules should help
prevent many cardholders from going under because of some of the
industry\'s worst practices, including usurious interest rates and
exorbitant fees. These regulatory steps may not eliminate the need for
comprehensive reforms being considered by Congress, but they could offer
faster relief.\
\
Americans\' reliance on credit cards for everyday needs has increased as
a result of the mortgage foreclosure crisis, a sagging economy and
higher energy costs. It\'s not unusual for those juggling bills in an
effort to hold onto their homes to max out their credit cards or to make
late or minimum payments. The Consumer Credit Counseling Service for
Maryland and Delaware averaged about 2,100 counseling sessions a month
for the first quarter of this year, compared with about 1,800 in the
same period last year. Residents in Prince George\'s, Montgomery and
Baltimore counties as well as Baltimore have been hit hardest.\
\
The belated plan announced last week by the Federal Reserve Board and
two other agencies would restrict the banks\' ability to raise rates on
existing balances based on other credit problems a consumer might have.
The proposal would also prohibit banks from treating payments as late
unless consumers are given about three weeks to make them. And on credit
card accounts with different rates for purchases and cash advances,
banks would have to split payments more fairly and not just apply them
to low-rate balances.\
\
While some companies warn that the proposals could dry up credit, the
industry should recognize that some of its practices have caused
irreparable harm. The proposals, which don\'t take effect until the end
of the year, should not prevent Congress from acting on its own. But
they offer consumers a chance to stabilize their credit card payments
enough to get out of debt - a worthy result.

**The Times Union (Albany, NY)**

**May 6, 2008**

**Give us some credit**

This is reform? This is the government\'s idea of cracking down on the
manipulation and greed of the credit card industry?

The first indication that the new rules proposed by the Federal Reserve
and other regulators last Friday aren\'t nearly tough enough comes from
Sen. Robert Menendez, D-N.J., author of pending legislation addressing
some credit card abuse issues.

\"At first blush, this does seem to be good news for credit card
holders,\" Mr. Menendez says. \"However, it remains to be seen if these
proposals will go far enough.\"

Think of that statement as the equivalent of the minuscule print on your
credit card statements explaining, in language you may or not be able to
entirely comprehend, the conditions under which a reasonable interest
rate, which used to be as low as, say, 10 percent, can soar to an
outrageous 30 percent or so.

These companies are getting rich at the expense of a customer base that
it has over a barrel. Credit card debt comes to about \$850 billion,
according to the Consumer Federation of America. That\'s four times what
it was in 1990. The average debt for the 58 percent of card-holding
households that do not pay their balance in full every month is about
\$17,000.

A closer examination of the proposed new rules says more about what
government regulators were willing to let credit card companies get away
with than it does about consumer protection.

No wonder why credit card debt has exploded when credit card companies
could impose \"late\" fees before a reasonable amount of time has
elapsed \-- 21 days, according to the new rules. Or when they could
persist in crediting payments to balances with lower interest rates, so
they could continue to collect interest on the balances that had higher
rates. Or retroactively raise interest rates on pre-existing balances.
Or unfairly compute balances in a tactic known as double-cycle billing.

Banning of such practices still does nothing to stop ever-climbing
interest rates.

Listen, though, to the shrieks of protest from the banking industry. The
American Bankers Association calls the proposed new rules \"aggressive
regulatory intervention in the marketplace that will result in higher
prices and less consumer credit.\"

\"If card companies cannot fully reflect risk, then millions of
consumers with good credit histories will end up with higher rates,\"
says Edward Yingling, the ABA\'s president and CEO.

Not very subtle, is it? Impose reason on us and we\'ll charge you more.

The endorsement of these rules changes by the Fed, of all institutions,
which responded slowly to the abuses that contributed to the subprime
mortgage crisis, ought to make it quite clear that they\'re hardly
radical. Yet bringing down credit card debt and making the rules fairer
just might require action that, in the prevailing political climate,
would be radical.

A sign that such a day is approaching will be when the people like Mr.
Menendez, ostensibly fighting the good fight for the consumer, can speak
without such uneasy caveats.

THE ISSUE: The Federal Reserve wants fairer rules to govern the credit
card industry.

THE STAKES: Consumers will pay dearly unless bolder measures are adopted

**\
The Miami Herald**

**May 6, 2008**

**HEADLINE:** Ban unfair practices in credit card industry;\
OUR OPINION: FED RULES AND PROPOSED LAWS STEPS IN THE RIGHT DIRECTION\
\
**BODY:**\
\
\
Ask anyone with a credit card about the abusive practices of lenders and
you\'re likely to hear a torrent of complaints about unfair late fees,
inexplicable interest-rate increases, misleading terms, confusing rules
and much more. Last week, the Federal Reserve Board finally took steps
to crack down on the credit-card industry, but banks signaled
immediately that they\'re going to put up a fight. The Fed must hold its
ground. Consumers need a break now more than ever.\
\
**Relying on credit**\
\
With the economy in trouble, more American families are having to rely
on credit cards to help meet everyday expenses, including the cost of
groceries and gasoline. In many cases, they are finding it necessary to
wait until the last minute to pay bills, and they may occasionally
exceed the credit limit as the squeeze on the household budget gets
tighter. All too often they run into trouble, as lenders pounce on the
slightest mistake to impose unreasonable penalties and raise interest
rates.\
\
This is where the new Fed rules would help. One proposed measure would
prohibit lenders from arbitrarily raising interest rates on any debt
unless the borrower was more than a month late in making a payment.
Another rule would declare that payments could no longer be classified
as late if borrowers did not get statements at least 21 days ahead of
the due date.\
\
These are common-sense proposals likely to help consumers who have been
at the mercy of unfair lenders for too long. The only thing wrong with
them, as we see it, is that they don\'t take effect soon enough \--
perhaps not until late this year or early the next, following a
public-comment period and other rule-making delays \-- and they don\'t
go far enough.\
\
Many consumers have learned the hard way that even if they pay the
minimum amount and pay on time, they still get penalized by higher rates
or added fees, or both. This is because even cardholders in good
standing may have a problem with another, unrelated lender, and that
becomes a pretext for a penalty by the card issuer. The new Fed rules do
not address this so-called \'\'universal default\'\' rule, but it would
be banned under the \'Credit Cardholders\' Bill of Rights\'\' (H.R.
5244) authored by U.S. Rep. Carolyn B. Maloney, D-N.Y.\
\
**Protect consumers**\
\
Her proposal and a similar bill by Sen. Chris Dodd, D-Conn., represent
broader protection for consumers because they target a wider array of
unfair practices. The Fed deserves credit for moving positively, if
belatedly, to eliminate some unfair practices involving credit cards,
but legislation offers a better, lasting solution. Rep. Maloney has more
than 100 co-sponsors for her bill, which should be more than enough to
bring this to the floor for a vote without further delay.

**The New York Times**

**May 3, 2008**

**Editorial**

# The Fed Aims at Credit Cards 

After growing consumer complaints about hidden fees and other tricks of
the credit card trade, the rules proposed by the Federal Reserve on
Friday to deal with unfair or deceptive practices are a modest step
forward. But the final versions of these rules will probably not go into
effect until next year, and the nation's bankers are already mounting a
strong opposition to any changes in the rough ways they are allowed to
do business.

Representative Carolyn Maloney, the New York Democrat who has been
pushing the important Credit Cardholders' Bill of Rights in Congress,
raised the right fears as the Fed proposal was announced. "These rules
may be watered down. They might not be put into effect at all," she
scoffed. "The Federal Reserve is not in the Constitution to correct
abuses. We are, and there are abusive, abusive, abusive practices going
on now."

The powerful American Banking Association has already signaled its plans
to fight the Fed's rules as a "regulatory intrusion" into the market and
warned that eventually it could be the consumers who lose because of
changes. But consumers are already losing as their interest rates on the
cards suddenly skyrocket, fees appear mysteriously on their bills and
even the billing cycles get shortened to make it harder to pay on time.

Congress needs to take up the issue now rather than wait for the Federal
Reserve to create rules that can be too easily changed. Representative
Maloney already has 110 co-sponsors on her bill in the House, but the
measure is stuck in the Financial Services Committee. So far, one
Republican on the committee has been brave enough to support her bill
--- Representative Christopher Shays of Connecticut. Only 11 of 36
Democrats on the committee have come forward to back cardholders'
rights.

Senator Christopher Dodd, chairman of the Senate Banking Committee,
finally introduced a measure curbing credit card abuse this week. As
with the House, the American Bankers Association has sent out a warning
to its congressional friends that these bills could create "unintended
consequences" for consumers. One particularly unfortunate consequence
would be if the more docile members of Mr. Dodd's committee manage to
keep the Senate bill in storage.

The banking industry likes to boast that more than 90 percent of credit
card customers have no problems with their little plastic friends. Given
that there are more than 1 billion credit cards believed to be in use,
that leaves a lot of people swamped by what is now called the "tricks
and traps" of the credit card business.

**The Toledo Blade (OH)**

**April 28, 2008**

Credit jungle

AMERICANS rely too much on credit cards, and in a bad economy that\'s
likely to get worse. However, credit-card companies can stack the deck
against consumers through unfriendly terms.

In the United States there are at least 1.3 billion credit cards in
circulation, which averages about 12 cards per household. Without a
doubt, many Americans need to develop greater discipline in buying on
credit.

But consumer advocates fault credit-card companies with too often taking
advantage of customers, and so favor stricter regulations. Such rules
might not even hurt the credit companies. The Tobin Project, a think
tank based in Cambridge, Mass., said, \"companies offering safer
products would be more likely to flourish.\"

Regardless, members of Congress are pushing action through a pair of
sensible bills - HR 5244 in the House and S 2753 in the Senate - which
would change some of the rules that govern America\'s heavy use of
plastic.

Both measures would bar credit companies from charging interest on
balances repaid during the grace period; requiring lower interest-rate
balances to be paid off before applying payments to higher interest rate
balances, and applying interest rate hikes retroactively. The
legislation would regulate two other practices: changing contract
clauses with little to no warning or reasoning and slapping late fees on
payments made on time but processed slowly.

Credit-card companies say these regulations would increase the price of
credit and limit the broad range of credit options available. Instead,
they have endorsed the intent of the Federal Reserve Board to develop
rules that will \"prohibit unfair or deceptive\" credit-card practices.

Consumer groups argue, though, that it\'s time for Congress to rein in
certain practices by credit issuers. Whether it\'s a son who faces
college expenses, a mother who needs to pay for medication, or anyone
who uses credit to make ends meet, most Americans know someone who has
felt victimized by credit-card offers containing terms that were not
fully explained or understood.

The reforms proposed in the bills provide thoughtful regulations to
protect Americans from excesses that favor the credit industry. Sensible
rules, like requiring 45 days\' notice before an interest rate hike and
up-front disclosure of what warrants a contract adjustment, only make
for a more transparent marketplace.

At a minimum, more consumer-oriented regulations would give card
applicants greater information on their cost of using credit. That would
be good for everyone.

**The Burlington Free Press (Vermont)**

**\
April 23, 2008 Wednesday\
01 Edition**

**SECTION:** OPINION; Pg. 6A\
\
**LENGTH:** 412 words\
\
**HEADLINE:** Sharing the blame for credit card debt\
\
**BODY:**\
\
\
The subprime mortgage mess taught us that when lenders make unaffordable
loans to those who fail to understand the terms, the fallout can drag us
all down. Then it makes sense to take a close look to weed out abuses in
another major lending category \-- credit cards \-- to make sure we
avoid another meltdown.\
\
Consumer complaints about the sharp rise in interest rates, sudden
changes in terms and baffling fees for even those who pay on time are
common enough to become part of the folklore of modern life. When credit
card offers are mailed to the deceased, children and even pets, then you
know something needs to be fixed.\
\
Rep. Peter Welch, D-Vt., is proposing a Credit Cardholders\' Bill of
Rights, which includes minimum notice before raising interest rates and
a requirement that bills be sent at least 25 days before they\'re due.
The bill, Welch wrote in an April 15 My Turn, \"protects cardholders
from due-date gimmicks, empowers them to set limits on their credit, and
shields them from misleading terms.\"\
\
When Congress starts looking at laws to protect consumers \-- think the
airline passengers bill of rights \-- it is a sign that the playing
fields in those industries are tilting too far in favor of businesses to
the detriment of customers.\
\
The cost of essentials and near-essentials in modern life \-- including
housing, cars and higher education \-- virtually guarantee that most of
us will at one time or another need to borrow money to get by.\
\
But credit card debt is often the result of everyday purchases, much of
it discretionary. While credit cards might enable our worst spending
habits, and unethical financial firms prey on unwary borrowers, many of
us end up facing unmanageable debt simply because we choose to live
beyond our means.\
\
For that, there is plenty of blame to go around, from our consumerist
culture to an economy that relies on shoppers for its vitality to
government policies that generally give credit for debt but tax
savings.\
\
None of this, however, is excuse for the fact that too many people who
ought to know better get in trouble over credit card debt anyway.
Ultimately, the responsibility lies with the consumer, the person who
chooses to use a credit card.\
\
Let Congress pass laws to keep unscrupulous credit card companies from
victimizing unwary consumers, but that\'s only part of the solution.
Consumers, too, must educate themselves on just what it means to use a
credit card, and take responsibility for their own spending habits.

**The Washington Post**

**April 22, 2008**

**HEADLINE:** Breaking the \'Be Nice\' Rule in the Energy Family\
\
**BYLINE:** Jeffrey H. Birnbaum\
\
**BODY:**\
\
\
To everyone feeling glum about \$3.50-a-gallon gasoline, here\'s some
good news: The fat-and-happy energy industry is fighting with itself.\
\
A new [natural gas organization
 ![](media/image2.png){width="7.152777777777777e-2in"
height="4.1666666666666664e-2in"}](javascript:void 0)called the American
Clean Skies Foundation has riled all sorts of energy interests,
including producers of coal, oil and even natural gas. Its critics have
accused the multimillion-dollar foundation \-- bankrolled by Oklahoma
billionaire Aubrey K. McClendon \-- of trying to snatch customers for
natural gas away from other forms of energy.\
\
That\'s a no-no in the close-knit energy world.\
\
The dispute erupted a year ago when the Natural Gas Council, whose
members include such energy lobby mainstays as the American Petroleum
Institute and the American Gas Association, wrote to lawmakers to
distance itself from ads purchased by a McClendon-backed group. The
ads\' theme: \"Face it: Coal is filthy.\"\
\
The council said the ads \"have been characterized as an effort by the
natural gas industry to capture market share from coal.\" In fact, they
explained, \"They were not purchased by the natural gas industry and
were not developed with the knowledge of the industry.\"\
\
The ads did not appear again, and McClendon, who heads a major natural
gas company, went on to create the foundation.\
\
In February, the same controversy reemerged. Denise A. Bode, the
foundation\'s chief executive, wrote a piece in the Hill newspaper that
again read like an attack on coal. It congratulated the Energy
Department for canceling funding for a low-emission, coal-based power
plant and suggested that the Bush administration end its backing for
\"clean coal\" technology.\
\
Kraig R. Naasz, president of the National Mining Association,
immediately wrote to Bode. He called her article \"a diatribe against
coal\" that \"marks a disturbing departure from the understanding we
tacitly share in the energy industries to avoid denigrating competing
fuels.\"\
\
Asked about the foundation, a spokeswoman for the American Petroleum
Institute added, \"Our country needs all forms of energy; we can\'t
afford to leave any out.\"\
\
Bode and McClendon have been busy meeting with energy lobbies to
reassure them that they plan to say only positive things about gas and
nothing nasty about any other forms of energy. But Bode said, \"We
probably had some false starts in our messaging earlier this year.\"\
\
Nice.\
\
Of Grunge and Voting\
\
Krist Novoselic is best known as the bassist in the groundbreaking rock
band Nirvana. But he recently added another title: chairman.\
\
Novoselic has replaced former congressman John B. Anderson (R-Ill.) as
chairman of FairVote, a group that advocates ways to encourage voting.
Anderson comes from a different realm entirely; he was an independent
candidate for president in 1980.\
\
The transition is not as strange as it seems. In 2004, Novoselic did a
national tour with FairVote to promote his book \"Of Grunge &
Government: Let\'s Fix This Broken Democracy!\" In the book, Novoselic
discusses how Nirvana emerged as the biggest band of the early 1990s and
how he became involved in politics.\
\
On second thought, it does seem pretty strange. In addition to chairing
FairVote, Novoselic now plays with a punk band called Flipper.\
\
Taking Credit\
\
Sen. Carl M. Levin (D-Mich.) contacted his supporters the other day to
complain about shady practices by firms that issue credit cards.**\
\
**\"Abusive practices by credit card companies are widespread,
well-entrenched and unlikely to end without a legislative ban,\" he
wrote in an e-mail. He then touted a bill he introduced, the \"Stop
Unfair Practices in Credit Cards Act.\"\
\
At the bottom of the note, he included a place to click in order to
donate to his campaign. And the way people are asked to contribute?\
\
By credit card, of course.\
\
A spokeswoman for Levin said that \"like most Americans, Senator Levin
appreciates the convenience of charging purchases to credit cards. What
he objects to are the abusive practices used by some credit card
companies at the expense of consumers.\"\
\
Gambling on Democracy\
\
The Poker Players Alliance is about to make a big bet on the upcoming
elections. The two-year-old lobby, which has nearly 250,000 paid
members, is forming a political action committee, PokerPAC.\
\
It is also initiating a voter registration drive. Its \"If You Play,
Have a Say\" campaign will feature voter registration efforts in
battleground states as well as during the 2008 World Series of Poker,
which will begin next month in Las Vegas.\
\
And that\'s no bluff.\
\
Homemaker Update\
\
A few weeks ago, I wrote about Todd Goldup, a candidate for the House
from New York who wanted to pay himself a salary out of campaign funds
even though he hasn\'t been earning any money otherwise. Goldup had no
income last year because he\'s a stay-at-home father to his two young
children.\
\
Well, last week the Federal Election Commission gave him his answer: No
way. In informal guidance, the agency said Goldup was not eligible for a
salary since he had none before. Such payments have to be comparable to
the income a candidate forfeits in order to run for office, the FEC has
said.\
\
But Goldup can pay for child care and auto expenses with campaign money,
which ought to soften the blow.\
\
Not everyone saw that as fair. \"Hopefully, when the FEC has a quorum
again they will revisit this issue and reach the obviously correct
conclusion,\" said Melanie Sloan of Citizens for Responsibility and
Ethics in Washington. \"Any homemaker, regardless of outside earned
income, is worth way more than any member of Congress.\"\
\
Departure of the Week\
\
Robert D. Blackwill, 67, former U.S. ambassador to India and once
President Bush\'s special envoy to Iraq, is leaving the lobbying firm
BGR Holding and heading to Rand.\
\
\"While I have had a terrific nearly four year experience in the private
sector,\" Blackwill wrote to friends, \"I now feel the compelling need
for sustained time to reflect and write about America\'s role in the
world in this difficult and dangerous period.\"\
\
Hire of the Week\
\
It\'s easy to imagine the American Library Association as a milquetoast
lobby. But that would be wrong.\
\
ALA is the world\'s oldest and largest library association, with more
than 66,000 members. Its headquarters in Chicago has a staff of 250. Its
Washington office, which was opened in 1945, consists of a lobbying
division (the Office of Government Relations) and a policy think tank
(the Office for Information Technology Policy).\
\
What\'s more, the lobby shop has five full-time lobbyists. Its newest
hire: Corey D. Williams Green, 34, who previously worked as assistant to
the president of the University of Maryland Baltimore County.\
\
Don\'t mess with librarians.

**St. Paul Pioneer Press (Minnesota)**

**\
April 21, 2008 Monday**

**SECTION:** MARY HUNT; Features\
\
**LENGTH:** 499 words\
\
**HEADLINE:** Everyday Cheapskate: Credit card changes face powerful
opposition\
\
**BYLINE:** By Mary Hunt\
\
**BODY:**\
\
\
A few months ago, Rep. Carolyn B. Maloney, D-N.Y., introduced the Credit
Cardholders\' Bill of Rights Act of 2008 (H.R. 5244). The proposed
legislation calls for comprehensive credit card reform.\
\
It\'s about time.\
\
The bill is aimed at preventing major credit industry abuses while
fostering fair competition between card issuers. If you ever have been
hit with an unfair late fee, been whacked with a double-digit interest
rate increase or suffered another abuse at the hands of your credit card
issuer, I\'ll bet that\'s you I hear cheering in the background.\
\
Rep. Maloney\'s bill establishes the following rights for credit card
holders:

-   Cardholders will not be subjected to arbitrary interest rate
    increases.

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-   Cardholders who pay on time will not be penalized unfairly.

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```
-   Cardholders will not be subjected to due date gimmicks.

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```
-   Cardholders will be shielded from misleading terms.

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```
-   Cardholders may set their own limits on their credit.

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-   Card companies will credit and allocate payments fairly.

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```
-   Card companies will not impose excessive fees on cardholders.

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```
-   Card companies will not issue subprime credit cards to people who
    cannot afford them.

Basically, that\'s it. Can you see anything in that list of measures
that would upset you if you were a credit card issuer? Well, guess what?
MasterCard and Visa are not happy about this. You can be sure there\'s
some heavy-duty lobbying going on, as well.\
\
In a statement issued March 13, MasterCard Worldwide said: \"Americans
benefit significantly from a highly competitive payment system that
offers incredible choice and financial opportunity for consumers.
However, the wide array of payment options American consumers currently
enjoy would be undermined by H.R. 5244, which would reduce choice,
decrease the availability of credit, and raise interest rates and fees
to many consumers.\"\
\
Excuse me while I laugh myself silly.\
\
Are we supposed to believe that the current horrific terms and
conditions under which cardholders are required to operate are in some
way good for us? Paying 29.9 percent interest is healthy? Or getting
tricked into paying a \$39 late fee for being five minutes late with a
payment gives us all kinds of choices?\
\
While I am personally hopeful this bill will be approved by both the
House and the Senate and go on to be signed into law, I am not holding
my breath. We may have a kind of David and Goliath showdown here between
Congress and the powerful banking and credit lobby in this country. The
odds are not good. But then again, neither were David\'s odds!\
\
The way I see it, all Maloney and her fellow representatives need are
five smooth stones. And millions of ordinary people contacting their
representatives and senators with strong encouragement to support the
Credit Cardholders\' Bill of Rights right through to its passage and the
signing of it into law.

**Brattleboro Reformer (Vermont)**

**\
April 19, 2008 Saturday**

**SECTION:** OPINION; Columnists\
\
**LENGTH:** 608 words\
\
**HEADLINE:** Abusive practices by credit card companies must be
stopped\
\
**BYLINE:** By Rep. PETER WELCH\
\
**BODY:**\
\
\
Most of us have heard the stories from our neighbors or friends: What
began as the ordinary use of a credit card unexpectedly and unfairly led
to a quicksand of debt.\
\
All too often these anguishing stories come from consumers who are
trapped by the unfair bait and switch practices or misleading tactics of
credit card companies.\
\
One Vermonter recently told me that her credit card company changed her
billing cycle without warning, requiring her to pay a larger payment in
a single month. Another family from St. Albans found themselves facing a
spike in their interest rate to a budget busting 27.99 percent yet they
had never been late on a payment.\
\
As I meet with Vermonters around the state, these stories are becoming
far too common. Vermonters want to pay their bills. But they also want a
fair system with clear rules that won\'t change on them arbitrarily and
without notice.\
\
It\'s time to restore the basic fairness and transparency that all
consumers are entitled to. As a start, I am sponsoring The Credit
Cardholders\' Bill of Rights, which would vastly improve the rights of
all credit card holders.\
\
This legislation protects cardholders against arbitrary interest rate
increases, prevents cardholders who pay on time from being unfairly
penalized, and prohibits card companies from imposing excessive fees.
For example, it requires companies to give 45 days notice before
changing their rates, allowing the consumer to cancel their card if they
choose. It would also require bills to be sent a minimum of 25 days
before they are due.\
\
To make payments more predictable, this bill also protects cardholders
from due date gimmicks, empowers them to set limits on their credit, and
shields them from misleading terms. These are simple, common sense
reforms that would go a long way in restoring fairness.\
\
However, there is more to be done.\
\
I recently held a roundtable discussion in Burlington on abusive credit
card practices. With participants representing Vermont consumers, banks,
and small businesses, I learned about a second issue that needs to be
addressed \-- so called \"merchants\' fees.\" These are fees credit card
companies charge to businesses each time their customers use a credit
card. When merchants pass these costs along in the price of their goods,
we all pay higher prices, especially on items such as gasoline.\
\
Convenience stores, country stores, and gas stations are charged swipe
fees of \$.10 to \$.15 for each transaction plus an additional 2 to 3
percent fee on the total sale. According to the National Association of
Convenience Stores, these costs to local merchants were \$6.6 billion in
2006 alone, an increase of 22 percent from the year before.\
\
According to storeowners I\'ve heard from, as the price of gas has
skyrocketed, these 2 to 3 percent fees mean that as much as \$.13 on
every gallon of gas that you buy at the pump is going to the credit card
companies. That adds up to as much as \$2.60 for a 20 gallon fill-up.
Consumers and store owners deserve a fair deal so I am pursuing
legislation that will give merchants the ability to negotiate fairer
fees with the credit card companies, which use their monopoly power to
inflict punitive costs.\
\
Credit cards provide a convenient service. However, the need to take a
hard look at abusive credit card industry\'s practices and how they are
affecting the increasing costs for the goods we purchase is long
overdue.\
\
At a time when Vermonters are already feeling a financial pinch, it\'s
time to end abusive credit card practices, eliminate excessive fees, and
give consumers and local businesses a fair deal.\
\
Peter Welch of Hartland is Vermont\'s Representative in the U.S. House.

**The Ithaca Journal (New York)**

**\
April 18, 2007 Wednesday\
1 Edition**

**SECTION:** **OPINION**; Pg. 7A\
\
**LENGTH:** 372 words\
\
**HEADLINE:** **Credit cards:** Lawmakers must regulate companies\
\
**BODY:**\
\
\
It would be wise for the state and federal officials to follow the
advice of Rochester Institute of Technology research professor Robert
Manning and others, who on Monday testified at a joint state Assembly
and Senate hearing on the credit card industry.\
\
At that hearing, according to Gannett News Service\'s Cara Matthews,
consumer advocates like Manning talked about the deceptive practices
credit card companies engage in. But it also became clear that if
anything is to be done about it, reform must occur at both the federal
and state level.\
\
At the federal level, Congress needs to pass laws that forbid credit
card companies from jacking up interest rates through \"universal
default\" provisions that punish credit card holders who charge over
limits or pay bills late (even once). States cannot regulate interest
rates for most companies, only Congress can, according to assistant
attorney general Michael Barbaro. Disclosure requirements can also be
changed only at the federal level.\
\
However, states can forbid credit card companies from engaging in
deceptive solicitations and other practices. And that is something our
state Legislature can fix sooner rather than later by forcing credit
card companies to produce contracts that are written in simple, easy to
understand language, just as solicitation letters are. Also, the
Legislature should ban \"bait-and-switch\" practices that have credit
customers thinking they are signing up for one card and then receiving
one with an entirely different set of rules and interest rates.\
\
By acting in concert, Congress and the state Legislature could serve
credit consumers well by passing legislation that cleans up the industry
and takes away the sting from the words \"credit card.\"\
\
Since three of four households hold bank credit cards, and from 1980 to
2005, consumers increased their yearly credit card charges from \$69
billion to \$1.8 trillion, according to the Consumer Protection Board,
it is obvious that the credit card issue is one that affects a majority
of Americans.\
\
And that is why it is imperative that our state and federal officials
work together create a credit system that allows the credit card issues
to be profitable yet also treat the credit consumer with fairness.

**The Macon Telegraph (Georgia)**

**\
Distributed by McClatchy-Tribune Business News**

**\
April 17, 2008 Thursday**

**SECTION:** COMMENTARY\
\
**ACC-NO:** 20080417-MA-EDIT-CREDIT-CARDS-20080417\
\
**LENGTH:** 520 words\
\
**HEADLINE:** EDITORIAL: Credit card companies need to be reined in\
\
**BYLINE:** The Macon Telegraph, Ga.\
\
**BODY:**\
\
\
Apr. 17\--Most credit card users, no matter how consumer friendly the
companies may seem, understand the financial institutions issuing the
cards are not their friends. Consumers understand, or should, that the
cards are an attractive financial trap ready to snap shut at the
slightest quiver.\
\
Card companies load up agreements in tiny print and legalese for a
reason. The more convoluted the disclosure, the less apt consumers are
to read it, and that\'s what the companies are banking on.\
\
The Consumers Union is backing legislation in Congress sponsored by Rep.
Carolyn Maloney, D-N.Y. and Sen. Robert Menendez, D-N.J., called the
Credit Cardholders Bill of Rights and the Financial Consumer Protection
Act of 2008. Both bills, while far from perfect, are efforts to curb
abuses of card issuers.\
\
The methods employed to further ensnare consumers are varied. Card
companies can escalate interest rates even if a consumer pays the bill
on time using a practice called \"universal default.\" It allows banks
to raise rates because another, unrelated bill, was paid late. According
to the Consumers Union, the clause in many credit card disclosures, \"We
reserve the right to change the terms (including APR) at any time for
any reason,\" gives banks carte blanche to do as they wish.\
\
Companies regularly change the deal with customers by sending out
fine-print disclosures giving consumers the right to opt out of changes.
However, the catch is they have to pay the balance and close the account
if they don\'t want to go along.\
\
The Consumers Union also points to a practice called \"double cycle
billing,\" where the cardholder is charged interest on a balance that\'s
been paid. How\'s that done? For example: Starting with a zero balance,
a consumer might charge \$1,000 and pay \$900. Instead of interest being
applied only to the remaining \$100, interest is charged on the entire
\$1,000.\
\
There are many other spikes in the credit card trap of which consumers
should be aware. Some banks are looking to their credit card business to
make up for losses in other areas. The least Congress can do is require
banks to deal honestly with its consumers. Americans had \$850 billion
in credit card debt at the end of 2007, estimated by the Consumer
Federation of America. On average, credit card debt per household is
\$7,430.\
\
The legislation is designed to take the mask off hidden charges and do
away with unfair interest rate hikes. Will that slow the flow of money
to banks practicing unfair and even devious methods to extract dollars
from their customers\' wallets? For sure. Unfortunately, if the
legislation is enacted, consumers will have to use any savings to fill
up their gas tanks.

> **The Kansas City Star**
>
> **\
> March 30, 2008 Sunday**
>
> **Credit card** and overdraft fees can trip you up\
> \
> **SECTION:** D; Pg. 1\
> \
> **LENGTH:** 813 words
>
> Drat those darn fees. Seems they\'re everywhere these days, tripping
> us up when we least expect.
>
> Sure, there are ways to avoid getting hurt. But consumers shouldn\'t
> have to feel as if they\'re tiptoeing through minefields.
>
> Two sources of fees are attracting scrutiny now: hidden credit card
> fees and bank overdraft fees.
>
> Two bills in Congress would expand disclosures provided to consumers
> of events that trigger higher costs and fees.
>
> The Credit Card Reform Act in the Senate would prohibit credit card
> issuers from making unilateral changes in agreements that abruptly
> affect credit terms.
>
> In addition, it would ban the controversial practice of universal
> default in which card issuers suddenly increase a cardholder\'s
> interest rate based on unrelated activity on another card or consumer
> loan.
>
> It also would limit penalty rate increases and require card issuers to
> get \"opt in\" approval from consumers who are under 21 before mailing
> solicitations that lure them into debt.
>
> Sen. Robert Menendez, a New Jersey Democrat and the bill\'s sponsor,
> compares the marketing of spring-loaded credit cards to the subprime
> mortgage market. \"Too many families feel like their credit card
> contracts are booby-trapped,\" said Menendez.
>
> Rep. Carolyn Maloney, a New York Democrat, and Rep. Barney Frank, a
> Massachusetts Democrat, have introduced a similar bill in the House.
> It addresses complaints that card issuers manipulate their mail to
> result in late payments even when consumers pay on time.
>
> It also would require 45 days\' notice on interest rate increases and
> stop card issuers from maximizing interest charges by applying
> consumer payments first to balances with lower interest rates before
> applying them to higher-rate balances.
>
> Credit card issuers deny they pack their cards with traps. They
> contend the fees and variable interest rates allow them to provide
> credit to more customers, including those with shakier credit or those
> with no history of credit, such as college students.
>
> They say their practices allow lower interest rates for responsible
> customers. Edward L. Yingling, CEO of the American Bankers
> Association, fears the legislation \"would have unintended
> consequences such as more expensive and less accessible credit.\"
>
> This new focus on card practices is overdue. Still, it won\'t
> substitute for consumers scrutinizing the come-ons that come in the
> mail.
>
> All the disclosure in the world won\'t help if consumers don\'t bother
> to learn their interest rate or credit limit.
>
> And the easiest way to avoid getting trapped in long-term debt is to
> simply ignore the initial temptation to put more on your card than you
> can pay off each month.
>
> Overdraft fees
>
> I\'ve written before about how some banks seem to set traps that catch
> consumers in murky overdraft fees.
>
> This month a Government Accountability Officeinvestigation documented
> the problem. GAO investigators, posing as consumers, visited 185
> banking branches to ask about banking and savings fees.
>
> Federal law requires banks to disclose fees and interest rates to
> consumers prior to opening an account.
>
> The investigators said one-fifth of the institutions did not provide a
> comprehensive list of fees and one-third failed to disclose terms and
> conditions.
>
> In addition, half of the banking Web sites studied did not provide
> information on fees. The study appears to support complaints from
> consumers who say they were unknowingly signed up for overdraft
> protection programs that allowed them to overdraw their bank accounts
> and then zapped them repeatedly with high fees of \$34 or more.
>
> The GAO said consumers paid over \$36 billion in fees associated with
> bank, thrift and credit union accounts. Adjusted for inflation,
> overdraft fees rose 11 percent between 2000 and 2007 and were among
> the highest fees, on average, the GAO investigated.
>
> The GAO findings provide a warning. But consumers can avoid being
> blindsided by asking banks to explain their overdraft programs and
> fees. You also can minimize overdraft fees by linking your checking
> account to a savings plan or a credit card account.
>
> Better yet, you can avoid overdrafts by writing down your expenses and
> withdrawals, including the use of your ATM card, in your checkbook and
> keeping a running balance.
>
> Credit card issuers and banks should be made to play fair with
> consumers.
>
> But consumers who learn how their accounts work and watch their
> spending are less likely to get tripped up.
>
> You may be in serious trouble if\... You\'re already paying a penalty
> interest rate on your credit card. You can only afford to pay the
> minimum on your balance. You are using your bank overdraft protection
> plan like a payday loan. Your credit card debt is five figures and
> growing. You\'re using your card for cash advances to pay bills.
> You\'re falling behind on rent or house payments. You can\'t afford to
> put anything in savings.

**The New York Times**

**\
March 29, 2008 Saturday\
Late Edition - Final**

Plastic Card Tricks\
\
**SECTION:** Section A; Column 0; **Editorial** Desk; **EDITORIAL**; Pg.
16\
\
**LENGTH:** 408 words

Americans are struggling with a very rocky economy while they are also
holding almost \$1 trillion in credit card debt. In most cases, those
cards provide a little flexibility with the monthly bills. But an
increasing number of people are defaulting because of the \'\'tricks and
traps\'\' \-- soaring interest rates and hidden fees \-- in the credit
card business.

Before more Americans get in so deep that they cannot dig out,
Washington needs to change the way these companies do business to ensure
that consumers are treated fairly.

The stories about deceptive practices are harrowing. At a recent news
briefing in Washington, a Chicago man told about what happened when he
charged a \$12,000 home repair bill in 2000 on a card with an
introductory interest rate of 4.25 percent. Despite his steady, on-time
payments, the rate is now nearly 25 percent. And despite paying at least
\$15,360, he said that he had only paid off about \$800 of his original
debt.

The Federal Reserve is focused mainly on making it easier for consumers
to understand credit card contracts \-- some go as high as 30 pages of
nearly unreadable fine print. Clarity, however, is not enough. One bank
contract stated baldly: \'\'We reserve the right to change the terms at
any time for any reason.\'\'

Congress needs to address numerous unfair practices, including interest
rates that skyrocket for no apparent reason and due dates that suddenly
shift \-- forward \-- so that an unwary consumer pays late. Late fees
are a big profit center in some banks. Some raise interest rates when
consumers get close to their credit limits. In other cases, a late
payment on one company\'s card raises the rates on other cards in your
wallet.

Americans deserve better. Senator Carl Levin, Democrat of Michigan, has
been pushing hard for more consumer protections. Representative Carolyn
Maloney, Democrat of New York, has put together an excellent first step
with a cardholder\'s bill of rights. It would require such reasonable
changes as a ban on collection of interest on amounts already paid. It
would require that cardholders get timely notices of changes in their
rates and be able to cancel their cards if the rates suddenly skyrocket
\-- and pay off the balances at the old rates.

Elizabeth Warren, a professor at Harvard Law School, has an especially
promising idea: a Financial Product Safety Commission to regulate the
industry. Today\'s credit card users could use the protection.

**Pittsburgh Post-Gazette (Pennsylvania)**

**\
March 26, 2008 Wednesday\
SOONER EDITION**

THREE BIG HEADACHES;\
THE NEXT PRESIDENT WILL HAVE TO COPE WITH A CREDIT CRASH;\
AND MESSES IN FOREIGN AFFAIRS AND EDUCATION\
\
**BYLINE:** DAN SIMPSON\
\
**SECTION:** **EDITORIAL**; Pg. B-13\
\
**LENGTH:** 919 words

There are three real bears of problems that whoever becomes president in
January 2009 will have to face.

One is the coming credit-card market plunge into the ravine, which will
make the current subprime mortgage mess look like a baby\'s dribble. The
second is an absolute mess in foreign affairs. The third is the
appalling, economically crippling fact that only seven of 10 young
Americans graduate from high school.

Presidential candidates for the most part operate at a level of
generality well above the issues they will actually have to deal with
when they are president. This is partly so that their campaign speeches
won\'t bore audiences. Imagine the less-than-intense enthusiasm of a gym
full of people for a talk on the political dynamics of South Asia. The
second reason is that the issues are truly complex and efforts to parse
them at a level where voters can differentiate between the candidates\'
positions are likely to fail.

Yet, all three of these issues \-- credit, schooling and foreign affairs
\-- are critical to our country\'s future and waiting out there for the
next president like a collapsed bridge on the darkened road ahead.

The parallels between the subprime mortgage disaster and the waiting
credit-card tragedy are frighteningly real. Americans carry heavy
credit-card debt \-- nearly a trillion dollars. Whether they will be
able to meet their payments in the months ahead as the costs of
essentials rise, disposable income shrinks, wages lag behind inflation,
job creation continues to fizzle and people\'s homes no longer are
available as piggybanks is a very good question, probably with a
horrible negative answer.

Nonetheless, banks and other financial institutions have bundled
credit-card debt, as they did with subprime mortgages, and issued bonds
against them. Those \"securities\" are now held as collateral by banks
and financial institutions just as bonds based on bundled mortgages
were. It is likely that the bonds based on credit-card debt are as
worthless as those based on subprime mortgages, but they nonetheless
play the same important role as the subprime paper did in the
all-too-clever U.S. and world financial markets.

The credit-card debt collapse will begin shortly, at the consumer level,
as increasing numbers of credit-card holders can no longer pay even the
minimums on their accounts. This probably will happen before the next
president even takes office.

The second of the three head-splitting problems was signalled for us by
a mistake made by one of the three principal candidates last week. It
turned out that this candidate did not know the difference between
Sunnis and Shiites and the organizations and countries they were
affiliated with in the Middle East and South Asia. (That\'s the Middle
East, where the oil comes from, the Iraq war has been going on for five
years and the Israeli-Palestinian peace process is as brown as last
weekend\'s Easter lily. South Asia is where 9/11 originated and the
Taliban and al-Qaida hang out.)

Now, for Americans, the bar of knowledge of world events and
personalities may have dropped perhaps as low as it can go with the
extraordinarily incurious, ignorant President Bush. At the same time,
Mr. Bush probably knows that Iran is basically Shiite and that al-Qaida
is Sunni. I do not expect candidates to be able to whip off the name of
the prime minister of Croatia or the religious distribution of the
people of Malaysia, but there is a minimum that the new president will
need to be able to keep in his head if he is to make sense of the
briefings he will receive from our intelligence agencies. As to the
moments when he will need to try to make reasonable decisions as to what
actions the United States should take in the face of important
developments around the world, it will be far too late then to learn the
fundamental facts about other places and people.

It wouldn\'t matter if the United States didn\'t matter. But it does.
For better or for worse we are tangled up with the world, economically
and politically. There is nothing more to discuss about globalization.
It is a simple fact of life. Watch the Asian and European stock markets
reel and rock as a result of stupid decisions made at the American
community level, where some banker gave someone a loan he couldn\'t
afford to pay back.

The third problem might be the worst, because it bears directly on the
future of our young people and their ability to cope in the world they
are walking into. It turns out that some states, to perpetuate their
access to federal money for education, have been lying to the public and
the federal government about the percentage of students their high
schools have been graduating. That\'s bad enough, but, even worse, the
percentage of young Americans graduating from high school is running at
a terrifyingly low 70 percent.

Never mind what a high school diploma is still worth. Imagine what kind
of employment \-- if any \-- someone who isn\'t even a high school
graduate can aspire to. Imagine even how someone with that level of
education can function in our society \-- dealing with ATM machines,
drivers\' licenses, voting, executing a contract for a cell phone, never
mind the small print, even making purchases in super markets.

So where, exactly, are we going? Someone better figure it out and try to
devise programs for dealing with these problems. Solutions are out
there, but they are devilishly complicated. We had better hope that we
elect someone with the qualities of intellect and character to cope with
these puzzles.

**The Denver Post**

**\
March 23, 2008 Sunday\
FINAL EDITION**

In debt we trust\
\
BYLINE: DAN HALEY Denver Post editorial page editor\
\
SECTION: PERSPECTIVE; Pg. D-04\
\
LENGTH: 590 words

Lugging three huge plastic trash bags packed tight with stuffed animals
to Goodwill, I made a mental note, again, that our children have too
much stuff.

Not to be outdone, their parents have too much stuff, too.

We\'ve been decluttering our home lately, which means, essentially,
jamming all of the useless things we\'ve accumulated over the years into
storage bins where they will be ignored for eternity.

It\'s been a rather depressing exercise because I could no longer hide
what I had long suspected: We\'re full-fledged members in America\'s
Club Gluttony.

We over-consume. We under-

save.

It\'s not an exclusive club. It has millions of members.

Americans no longer live within their means. And why should they? Over
the years, banks and the federal government have created enough schemes
that we really believe we don\'t have to.

Yet now we\'re feeling the effects of our financial illiteracy.

Our economy is driven by consumer spending so we\'re encouraged to
spend, spend, spend. We\'ve done such a good job, our national savings
rate is below zero.

Nearly everyone has access to amazing amounts of credit today, so
naturally our credit card debt has reached historic levels. We owe
nearly \$1 trillion.

Remember layaway? If you couldn\'t afford something, you put it on
layway and made payments. That\'s called living within your means. It\'s
a totally foreign concept. Now, you simply apply for instant store
credit and walk out with your purchase.

And if you can\'t make those credit card payments, you can always take
out a high-interest \"payday loan.\" More and more Coloradans do each
year.

People also have used their homes as ATMs, borrowing against the value.
That cash cow has dried up with the slumping housing market and, as the
saying goes, the chickens have come home to roost. Except now there\'s
no roost. Coloradans are losing their homes at record rates.

Thousands of people are teetering on the edge of bankruptcy because
they\'re living in homes they can\'t afford. Predatory lenders are to
blame in some cases. But at some point, the blame has to be on us for
not comprehending the small print, for borrowing more than we can
realistically afford.

We have unrealistic expectations of what we should achieve in this
country. We\'re all entitled to dream, but we\'re not all entitled to
the same American dream.

That giant sucking sound you hear isn\'t NAFTA, as Barack Obama and
Hillary Clinton now want you to believe, it\'s our own financial
illiteracy taking us right down the drain.

And now we\'re looking to the federal government for bailouts when -
surprise - it doesn\'t live within its means either.

Congress and the president spend, spend, spend like we do, and have
created historic deficits. Yet in a few weeks many Americans will
receive checks from the federal government - so we can spend more. And
considering the federal government is broke, it\'s money borrowed from
foreign countries.

As an editorial in the Des Moines Register noted last week: \"With the
value of the dollar sliding and record national debt piling up, Uncle
Sam finds himself going down to the pay-day lender run by the Chinese
government.\"

It may help spur the economy, but selling your country\'s future to
another country hardly makes sense, especially from a national security
standpoint.

And as we swirl down the fiscal drain, the remaining candidates for
president have yet to address spending and entitlement reform in any
meaningful way.

Americans need to clean their own houses first, then demand government
do the same.

Dan Haley can be reached at

[[dhaley@denverpost.com]{.underline}](mailto:dhaley@denverpost.com)

**The Record (Bergen County, NJ)**

**\
March 21, 2008 Friday\
All Editions**

**SECTION:** **OPINION**; Pg. L07\
\
**LENGTH:** 689 words\
\
**HEADLINE:** Putting **credit card** companies on notice;\
PROTECTION AGAINST CONSUMER RIP-OFFS\
\
**BYLINE:** By ROBERT MENENDEZ, Wire Services\
\
**BODY:**\
\
\
AS THE SUBPRIME mortgage meltdown wreaks havoc on our economy, another
storm is brewing on the horizon. It\'s a storm brought on by the
downturn in the economy and the upswing in personal debt, and it
ominously bears some similar hallmarks to those seen at the front end of
the foreclosure crisis.\
\
The storm is credit card debt, and judging by the flood of calls and
letters to my office from New Jersey residents who are in financial
crisis, we cannot afford to just wait this one out.\
\
As the economy weakens, Americans are floating more of their monthly
expenses ahead by putting them on credit cards.\
\
Unfortunately, their credit card contracts often wind up making their
financial situation worse.\
\
I have heard from people who feel like their contracts are
booby-trapped, who have fallen through trap doors concealed under a
layer of fine print. If they take one false step, their credit score can
plummet and their interest rate can shoot through the roof.\
\
I heard from a resident of West Orange, who missed one payment and saw
his interest rate nearly double, from 15.25 percent to 29 percent.\
\
I heard from a resident of East Rutherford, whose interest rate
skyrocketed after one late payment, and then faced additional late fees
that pushed him over his credit limit - a series of financial dominoes
that left him in serious trouble when the last one fell.\
\
One mistake, \$500\
\
I heard from a resident of Ridgewood, who purchased a \$3,000 television
because of an appealing, no-finance offer. She set up automatic
payments, and missed a payment by one day because her bank changed the
due date without notifying her. Her bank then charged her another \$500
in fees.\
\
The credit card industry has argued that business is business, and some
have suggested that the huge penalties for late payments are the result
of a lack of personal responsibility on the part of the cardholder.\
\
Of course, personal financial responsibility is important, and I\'ve
worked to improve financial education and make financial counseling more
widely available in our communities.\
\
But this is a simple question of fairness.\
\
Unfair practices\
\
When a customer is completely up to date on credit card payments, but
the bank raises his or her interest rate because of a late payment on a
completely unrelated bill - that\'s not a fair business practice.\
\
When a customer misses a payment, and the credit card company applies a
colossal interest rate not only to future purchases, but to any past
balance as well - that\'s not a fair business practice.\
\
When companies bombard teenagers with offers for credit cards, knowing
that the credit limit is beyond their financial means - that\'s not a
fair business practice.\
\
New Jersey consumers deserve protection from unfair credit traps, and
that\'s why I\'ve introduced the Credit Card Reform Act in the U.S.
Senate.\
\
The main principle behind this bill is simple: credit card companies
should be clear about the rules up front, and shouldn\'t change them in
the middle of the game.\
\
The bill will end the industry practice known as \"universal default,\"
so a company can\'t raise your interest rate if you have a perfect
record with that credit card, but miss a payment with some other
creditor. It will also force fees to be tied to reasonable costs
incurred by the company, protect young consumers from card solicitations
they didn\'t ask for, and make sure that when a company offers you a set
of terms, it can\'t change those terms once you\'ve applied for a card.\
\
It\'s time we take away the booby traps in credit card agreements, stop
letting the rules change in the middle of the game, and help young
people start off their financial lives on the right foot.\
\
We cannot allow predatory and deceptive practices in the credit card
industry to continue as we did in the subprime mortgage market. For far
too many people, credit card debt is already a personal financial
crisis.\
\
If we don\'t act soon, it could grow to become another national
financial crisis. That would be the late fee if Congress is slow to
act - a penalty this country cannot afford to pay.

**Lowell Sun (Massachusetts)**

**\
March 19, 2007 Monday**

**SECTION:** **OPINIONS**\
\
**LENGTH:** 794 words\
\
**HEADLINE:** Oversight in action\
\
**BYLINE:** The Lowell Sun\
\
**BODY:**\
\
\
With 51 votes in the Senate, Democrats fall far short of the numbers
they need to break a filibuster (60) or override a veto (67), so their
legislative record this session is likely to be meager. But they are
already making their mark in another way \-- oversight.\
\
As the majority party in both houses, Democrats control committee
agendas, hearing schedules and witness lists. Perhaps their most
important power can be summed up in one word: Subpoena.\
\
An excellent example of this power occurred last week when the Senate
Subcommittee on Investigations, headed by Carl Levin of Michigan,
summoned three executives of credit card companies to explain some of
their more outrageous and abusive practices. Even before the hearing,
two of the companies announced changes in those practices and issued
apologies to their customers.\
\
Citigroup ended \"universal default,\" which allows companies to raise
credit card interest rates when a customer is late in paying any bill,
say from an electric utility or cable provider. Citi also dropped their
practice of arbitrarily raising rates at any time for any reason. Now,
charges can rise only when a card expires or a customer defaults.\
\
Chase Card Service shelved a particularly pernicious trick, called
\"double cycle billing,\" which allows card companies to level late
charges even on customers who pay promptly. Richard Srednicki, the
company\'s CEO, also apologized to another witness, Wesley Wannamacher,
who was socked with huge penalties for slightly exceeding his credit
limit to pay for his wedding. \"In this case we simply blew it,\"
Srednicki admitted.\
\
The companies claim they are acting voluntarily, but that\'s absurd. As
Travis Plunkett, legislative director of the Consumer Federation of
America, told the Web site MarketWatch: \"Credit-card issuers are
announcing unilateral changes in their practices \... because they are
now fearful that Congress will legislate in this area and they don\'t
want that to happen.\"\
\
In fact, when Congress passed a bill in 2005 making it harder to declare
bankruptcy (a change strongly supported by the credit card companies),
Democrats tried and failed to attach amendments correcting some of the
very abuses that have now been changed. Republicans, who then ran the
Senate and receive large contributions from banking interests, rejected
any new regulations.\
\
\"The lobbying dollars are all on the side of industry,\" says Harvard
law professor Elizabeth Warren, an expert on bankruptcy law. \"That\'s
why they get to make the rules.\"\
\
No longer. Democrats have their own campaign contributors to pay off \--
from trial lawyers to trade unions \-- but when it comes to correcting
business malpractice, they are tougher and more independent than the
GOP.\
\
Not all the credit for raising these issues goes to politicians,
however. Writer and director James Spurlock has made a major
contribution with a new book and movie, both called Maxed Out, that
document the worst excesses of the credit industry.\
\
Spurlock starts with some stunning statistics: Bankruptcy rates are 20
times higher than during the Depression; credit card companies earned
\$79 billion last year from interest payments and fees; debt causes more
college students to drop out than academic problems.\
\
In Spurlock\'s view, bankers have made a basic change in their approach:
Instead of targeting solid customers who can handle loan payments, they
market to poor and vulnerable card carriers who need credit desperately
but often fail to meet their payments.\
\
As Spurlock told Steve on NPR\'s The Diane Rehm Show, the companies
don\'t want people to pay their bills promptly, they are \"setting their
customers up for failure\" because their real profits come from late
fees and confiscatory interest rates than can exceed 30 percent. In the
banking business today, he said, \"it\'s much more profitable to get
people to spend money than to save money.\"\
\
Two caveats. Credit card companies certainly have a right to use
\"risk-based pricing.\" But they don\'t have a right to entrap people
with confusing and deceptive practices that bury them under mountains of
debt.\
\
More importantly, there is a huge role here for personal responsibility.
In the end no one is forced to accept or use a credit card. A caller to
NPR, named Kathleen, made a good point, saying she had cut up her credit
cards and returned to paying her bills \"the way my dad used to do it.\"
With cash.\
\
But not everyone has Kathleen\'s self-discipline or role model. Many
consumers need a measure of protection from predatory credit card
companies. Congressional oversight provides a good start, but if the
banking industry refuses to reform itself, stronger regulation should be
the next step.

**The Oregonian (Portland, Oregon)**

**\
February 27, 2008 Wednesday\
Sunrise Edition**

Read this **editorial** and you\'ll get frequent-flier miles and cash
back\
\
**BYLINE:** The Oregonian\
\
**SECTION:** **Editorial**; Pg. C06\
\
**LENGTH:** 461 words

SUMMARY: Unless the terms of this agreement change, in which case we\'ll
let you know later in teeny tiny print

Credit card companies make more promises than high school sweethearts.
Cascading daily through our mail slots, their solicitations proffer an
endless font of financial freedom. Ah, borrowing . . . it\'s more
American than mom and apple pie.

Who, then, could possibly quibble with the great democratization of
credit that has taken place in recent years?

You guessed it: We can.

The vast river of credit now coursing through our economy may seem to
afford every American access to that most elusive of all economic
engines: capital. In fact, we are witnessing nothing less than a
carefully calibrated assault on the poor and the disadvantaged. The
industry\'s predatory practices expressly imperil the neediest of our
citizens, first consigning them to poverty, then wantonly penalizing
them for getting trapped there.

Some chilling statistics:

\* Last year, credit card companies popped 8 billion solicitations in
the U.S. mail.

\* Many credit cards carry (carefully concealed) interest rates as high
as 25 percent.

\* One-third of all cardholders currently pay interest rates above 20
percent.

And here\'s the kicker: The poorer you are, the higher the interest rate
you pay.

That\'s because if you\'re as much as one minute late making a single
payment, the credit card company will hit you with a higher interest
rate.

But wait, there\'s more.

The company will then apply that rate retroactively to your balance.

And they\'re still just getting started. Because the industry wallows in
a practice it calls \"universal default,\" a late payment on Card A can
also raise your rate on Card B.

And Card C.

And Card D.

\"Usury\" seems way too polite a term for such practices.

All this is happening because, in 1978, the Supreme Court began
deregulating the credit card industry, compounding its folly with a 1996
ruling that all but outlawed limits on interest rates and penalty fees.
Into this morass has stepped Oregon Sen. Ron Wyden with a proposal so
modest we\'re almost embarrassed to praise him for it.

The Credit Card Safety Star Act, which Wyden introduced late last year
with Illinois Sen. Barack Obama, called on the Federal Reserve to create
a five-star rating system for credit cards, similar to the crash test
ratings for cars.

It could be a nice first step, but frankly we\'re more taken with the
approach of Michigan Sen. Carl Levin, who thinks it\'s simply time to
get on with re-regulating the credit card industry.

Under the guise of extending access to capital to all, an industry that
is making billions by consigning millions to persistent debt is more
than overstaying its welcome in the free market.

It is begging to be handcuffed.

Congress should move quickly to oblige.

**The Columbus Dispatch (Ohio)**

**\
February 24, 2008 Sunday\
Home Final Edition**

Deeper in debt;\
Americans fall into same spending trap as federal government\
\
**SECTION:** **EDITORIAL** & COMMENT; Pg. 04G\
\
**LENGTH:** 435 words

Americans are addicted to debt. And like any addiction, this one is
leading to bad ends.

That is apparent in the recent news that a growing number of people are
turning to a harmful form of debt relief: tapping their 401(k)
retirement savings accounts to pay off credit-card debt and to meet
other ordinary expenses. Retirement-plan administrators saw a 17 percent
jump in the number of workers in 2007 asking to withdraw their money
prematurely.

The loss of the benefit of that money and the interest it would accrue
by the time these workers retire is bad enough. Worse is that if workers
younger than 59 1/2 withdraw funds, that previously untaxed money is
taxed and an additional 10 percent penalty is imposed. In the end,
workers can lose more than a third of their withdrawals to the
government.

Financial experts have been warning that this country is headed for a
retiree crisis: millions of people who haven\'t saved enough to get by
for the remainder of their lives. The Center for Retirement Research at
Boston College estimates that 43 percent of households are not saving
enough to maintain their current standard of living when they retire.
Depletion of 401(k) accounts aggravates this situation.

But the reasons for the withdrawals are not hard to discern As of
December, Americans owed a total of \$2.55 trillion in consumer debt, or
\$8,402 for every man, woman and child. That\'s double the amount of
debt only a decade ago. About \$944 billion of that total was
credit-card spending.

The withdrawals from 401(k) funds comes as other forms of financial
relief have been contracting: Home-equity loans have dried up as housing
prices have fallen, and escaping debt through bankruptcy is more
difficult since the law changed in 2005.

College-educated young adults are saddled with an average of \$21,000 in
student loans. And they\'ve grown up in a have-it-all-now culture, in
which living on credit is the norm. People ages 25 to 34 spend an
average 16 percent more than they earn, Fast Company magazine reported
in December.

And living on credit is a hazard not only for individuals and families.
The federal government certainly hasn\'t been a model for fiscal
responsi- bility: The national debt is \$9 trillion and climbing, and
the country continues to run \$400 billion annual deficits.

And even in the midst of a white-hot presidential campaign, this
profligate federal spending is hardly an issue, except to the extent it
is used to argue against the war in Iraq.

The nation is wallowing in debt. It\'s long past time to restore fiscal
sanity to the nation\'s households and the halls of government.

**St. Louis Post-Dispatch (Missouri)**

**\
Distributed by McClatchy-Tribune Business News**

**\
February 19, 2008 Tuesday**

**EDITORIAL:** The credit monster\
\
**BYLINE:** St. Louis Post-Dispatch\
\
**SECTION:** COMMENTARY\
\
**LENGTH:** 650 words

Feb. 19\--The subprime mortgage crisis started when bankers and
investors who should have known better ignored one of the basic tenets
of the lending business: Don\'t lend lots of money to people who might
have a hard time paying it back.

It was the \"greater fool\" theory: As long as housing prices kept
rising, shaky borrowers could refinance their loans with a greater fool,
and the original investors would get their money. Eventually, housing
prices got too high, and the dominoes started falling. The first to go
were securities backed by subprime mortgages.

Once some dominoes fall, it\'s hard to stop the reaction from spreading
from row to row to every corner of the table. We\'re seeing that now, as
parts of the credit system that have nothing to do with mortgages are
starting to waver.

Losses on subprime mortgages weakened big banks, which made them pull
back from other kinds of risky lending. Suddenly, credit cards are
getting harder to get, and rates on cards are rising for consumers with
poor credit. Business loans are a bit harder to come by, and the student
loan market is showing signs of strain.

Worse, financial institutions late last year became reluctant to lend to
each other, since no one knew which player might be sitting on a
subprime bomb. Parts of the short-term money market started to clog up.

Some subprime loans were insured by bond insurance companies, such as
MBIA and Ambac. Now those insurance companies find themselves on the
hook, and their sterling credit ratings are in danger.

Those troubled insurers also insured lots of bonds that have nothing to
do with mortgages. Now those bonds are in danger of losing value as
their insurance falters. That could deepen losses for banks and other
investors holding those bonds.

Thus a whole new row of dominoes is starting to wobble. Last week that
caused trouble in the so-called \"auction-rate\" market, an obscure
corner of the financial world where companies go to borrow short-term
money cheap. As Post-Dispatch business columnist David Nicklaus
reported, the Missouri Higher Education Loan Authority and [[Ameren
Corp.]{.underline}](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3420272657&csi=169235&A=0.2726173074769309&sourceCSI=162599&indexTerm=%23CC0002B1G%23&searchTerm=Ameren Corp. &indexType=C)

got caught temporarily in the squeeze. Ameren found itself paying 12 to
18 percent interest on loans that had been at 2 to 4 percent.

Thus did a blooper in the mortgage business morph into a problem for an
electricity company.

Meanwhile, the subprime fiasco is making investors wary of other
asset-backed bonds. That\'s making it harder for student loan companies,
like MoHELA, to raise money, causing some to worry about a possible
student-lending crunch.

So far the credit crunch is not severe. It\'s being felt mainly by those
with shaky finances. Good corporate borrowers still can issue bonds.
Individuals with good credit still can obtain credit cards and
mortgages.

But banks are losing billions, and no one is sure how tight the crunch
will become. A slowing economy always causes lenders to tighten lending,
and that adds to the worry level.

The Federal Reserve is busy trying to stop the falling dominoes, lending
billions to the banks at low interest rates. It\'s also cutting
short-term interest rates to encourage people to borrow and spend.
Congress has authorized a \$168 billion stimulus program to get economy
rolling again.

We\'ve been through credit crunches before. But the financial system is
now much more complex, interconnected and globalized. No one is quite
sure how failures in one part of the system will affect the others. No
one knows when the last domino will fall.

**St. Petersburg Times (Florida)**

**\
February 18, 2008 Monday\
South Pinellas Edition**

**SECTION:** NATIONAL; Pg. 14A\
\
**LENGTH:** 367 words\
\
**HEADLINE:** CREDIT CUSTOMERS NEED A BILL OF RIGHTS\
\
**BODY:**\
\
\
Congress is talking about writing a new bill of rights, this one for
credit card holders. It can\'t come too soon. Banks that once used any
excuse to sock it to credit card customers aren\'t even waiting for a
reason to increase interest rates and fees.\
\
Richard Davis, an insurance agent from Virginia, found out the hard way.
Although he had always made timely payments on his Chase Visa card, the
bank tripled his interest rate from 8 percent to 24 percent without
warning, the Washington Post reported. And that\'s not an isolated
case.\
\
Despite a decline in interest rates overall, more banks are making up
for losses in their mortgage lending by raising rates on credit cards,
even for customers who play by the rules. Last month, [Bank of America
 ![](media/image2.png){width="7.152777777777777e-2in"
height="4.1666666666666664e-2in"}](javascript:void 0)sent some of its
card holders letters notifying them of rate increases as high as 28
percent without providing a reason, BusinessWeek reported. The only way
to keep the old rate was for customers to send an opt-out letter and no
longer use their cards.\
\
In the past, such interest rate decisions were usually based on a
decline in the card holder\'s credit rating (or FICO score). No longer,
and the change could hurt not only families that carry credit card
balances but also the overall economy, which is already facing a crisis
linked to subprime mortgages and the slumping housing market.\
\
Abuses by the largely unregulated credit card industry need to end. A
good start would be for Congress to pass the Credit Cardholders\' Bill
of Rights, filed by Rep. Carolyn Maloney, D-N.Y., and a similar bill in
the Senate.\
\
\"A credit card agreement is supposed to be a contract, but in recent
years cardholders have lost the ability to say no to unfair interest
rate hikes and fees,\" Maloney said.\
\
The bill would stop arbitrary interest rate increases and protect
cardholders with good payment records from being penalized. It would
also end some of the worst abuses, such as misleading terms and gimmicks
that lead to excessive fees.\
\
It would be nice if every American could pay off his or her credit card
balance at the end of each month, but that\'s not financial reality.
Congress needs to clean up the credit card industry before it becomes
the next shock to the economy.

**Copley News Service**

**San Diego Union Tribune\
February 15, 2008 Friday 12:04 PM EST**

**Credit card** crunch\
\
**BYLINE:** The San Diego Union-Tribune\
\
**SECTION:** WEEKLY **EDITORIALS**\
\
**LENGTH:** 463 words

For Americans who use credit wisely, life can be more productive and
enjoyable. Used unwisely, credit can plunge families and individuals
into disaster. With the focus on subprime mortgages and their effect on
the broader economy, those who purchased homes they could not afford -
either knowingly or under pressure from unscrupulous lenders - face the
reality of losing their homes and likely their ability to borrow for
some time. Foreclosures also cause banks and other lending institutions
to tighten lending practices, making it harder even for borrowers with
good histories to obtain credit.

Beyond the housing market, consumers also are falling behind in other
types of credit. Home equity credit is tightening. Some consumers also
are facing problems with auto loans that sometimes run 72 or 84 months
and, like some homes, leave borrowers owing more than their cars are
worth at trade-in time.

But despite all the news about consumer problems with mortgages, equity
lines of credit and auto loans, credit card problems also have come to
affect a growing number of Americans.

With bankruptcies going up, the banking industry in 2005 pushed
legislation through Congress that made it much more difficult for
consumers to discharge their personal debts. New hurdles in the law,
however, have not stopped some consumers from spending more than they
could afford.

According to information released by the office of Sen. Dianne
Feinstein, D-Calif., the average American has roughly \$9,500 in credit
card debt. That\'s twice the average level of debt households carried 10
years earlier.

One of the things that consumers who overextend themselves tend to do is
make minimum monthly payments. Using the example just cited and assuming
an interest rate of 13.75 percent, a typical household making the
minimum payment on \$9,500 would take 35 years to pay off that debt. In
doing so, the household would pay \$12,000 in interest.

Feinstein has introduced legislation that might help educate consumers
on minimum credit card payments, hopefully keeping many out of financial
trouble. Most important, her proposal would require credit card
companies to warn consumers who make minimum payments in plain language
how long it will take them to pay off their debts and how much it will
cost them. Specifically, Feinstein\'s proposal would amend the federal
Truth in Lending Act, which pre-empted a 2001 California law that would
have required the same warning.

The credit card industry says providing consumers with this information
would be expensive. But considering how much is being made off consumers
in higher interest rates, late and over-the-limit fees, it\'s difficult
to imagine the industry\'s bottom line being threatened by educating
customers.

**Albuquerque Journal (New Mexico)**

**\
Distributed by McClatchy-Tribune Business News**

**\
February 13, 2008 Wednesday**

**EDITORIAL:** Congress Should Stop **Credit-Card** Shakedown\
\
**BYLINE:** Albuquerque Journal, N.M.\
\
**SECTION:** COMMENTARY\
\
**LENGTH:** 365 words

Feb. 13\--When the Federal Reserve started slashing interest rates last
year, was its rationale to:

A. Ease credit an get consumers out there spending?

B. Tighten credit and get credit-card companies out there gouging?

Unfortunately, B is how it\'s played out. Despite four Fed cuts since
August, credit-card interest rates remain as high as ever \-- or higher.

One example: Virginia insurance agent Richard Davis saw the rate on his
Chase Business Visa triple in December \-- from 8 to 24 percent.

Like that\'s going to get anyone out there spending.

Card companies say they have a right to protect themselves \-- from
risky borrowers and write-offs in the ongoing home-foreclosure
nightmare. But there\'s a place in between extending cheap credit to
unqualified borrowers and recouping losses by piling interest on folks
who never miss a payment. Between giving credit risks a free ride and
making it impossible for borrowers to pay down their debt.

Despite months of Federal Reserve prodding, credit card companies
haven\'t found it yet.

In addition to raising interest rates, creditors have raised
congressional interest. The Credit Cardholders\' Bill of Rights Act of
2008 has been introduced in the House; a similar bill has been proposed
in the Senate. Key measures would limit fees and rate changes.

Apparently that\'s what the industry responds to. Congressional pressure
last year got Citigroup to stop penalizing cardholders who made late
payments to other creditors. And this year Chase will stop jacking up
rates on cardholders whose credit scores drop.

With almost \$940 billion in revolving credit-card debt in the United
States, it\'s critical that borrowers are given a fair shot at repaying
their debt instead of being pushed into default.

That\'s in everyone\'s best interest.

**Portland Press Herald (Maine)**

**\
February 11, 2008 Monday\
FINAL Edition**

Credit-card debt looking like subprime mortgages;\
Consumers appear to be reacting to misuse of credit cards rationally,
hurting the economy.\
\
**BYLINE:** \--\
\
**SECTION:** **EDITORIAL**; OUR VIEWS; Pg. A6\
\
**LENGTH:** 393 words

It shouldn\'t have come as a shock that the segment of the housing
market that relied on loose credit and ever-growing home prices would
meet an ignominious end. Nor should anyone be surprised that the liberal
use of credit cards by consumers living on the financial edge may soon
take another big bite out of the economy.

The data are starting to bear out what many have observed anecdotally
for years. Consumers have been using credit in inappropriate ways, and
the bills are coming due.

Credit-card delinquencies are on the rise and, perhaps more telling,
consumers grew very cautious about using their plastic during the
holiday shopping season last year.

The Federal Reserve says that year-over-year double-digit increases in
credit-card use came to an abrupt end in December. The month earlier, on
a seasonally adjusted basis, consumers charged 13.7 percent more on
their cards than the year before. December saw just a 2.7 percent
increase in credit-card use.

Perhaps just as worrisome is the fact that card issuers say people are
using their credit more often for staples such as groceries and gas.

While this has been a trend for years, reflecting the convenience of
plastic money, buying necessities with credit balances is not a
sustainable strategy for any household. Eventually, the credit runs out
but the need for groceries does not.

Many economists fear that consumers will respond to these trends
rationally. That is, they\'ll look at their expenditures and make
decisions to cut back and live within their means.

That\'s the right thing for any person relying on credit for everyday
items to do. But, across the wide swath of all U.S. consumers, such a
trend could put pressure on an economy already feeling the effects of
higher energy prices and a meltdown in the subprime mortgage market.

One supposes that consumers will get a respite of sorts when the
government mails out tax rebate checks of \$600 for individuals and
\$1,200 for couples later this year, but at best, that\'s temporary
relief.

Like many households, the U.S. economy may have to suffer through some
lean times in the coming months to make up for past excesses.

That\'s painful, especially for families directly affected by a job
loss, but over time it may be good medicine for both consumers and the
markets that serve them to learn that there\'s no subsititute for sound
use of credit.

**USA TODAY**

**\
February 8, 2008 Friday\
FINAL EDITION**

Card issuers invest in D.C.\
\
**SECTION:** NEWS; Pg. 10A\
\
**LENGTH:** 459 words

The economy\'s sinking. Maxed-out consumers are struggling to pay bills.
And **credit card** issuers? They\'re busy trying to wring more money
out of their customers.

[[Bank of
America,]{.underline}](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3420108464&csi=8213&A=0.5964985387956963&sourceCSI=162599&indexTerm=%23CC0002PWF%23&searchTerm=Bank of America, &indexType=C)

**Bank of America,**  -Search using:

-   ![](media/image12.png){width="0.13472222222222222in"
    height="0.13472222222222222in"}[News, Most Recent 60
    Days](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3420108464&csi=8213&A=0.5964985387956963&sourceCSI=162599&indexTerm=%23CC0002PWF%23&searchTerm=Bank of America, &indexType=C)

for example, is raising rates on some cardholders, even responsible ones
who typically pay their bills on time, USA TODAY\'s Kathy Chu reported
Thursday. Other issuers have shortened grace periods or hiked already
record-high fees.

In fact, under existing law, card issuers can raise rates \"at any time,
for any reason.\" As for fees, the sky\'s the limit.

For years, banks have gotten away with such practices because they\'ve
known how to invest their money \-- or should we say, your money \--
wisely:

\*In the past two decades, employees and political action committees of
three of the nation\'s biggest credit-card issuers and their trade
association have lavished more than \$74 million on candidates in
federal elections and political party committees.

\*The American Bankers Association, Citigroup, JP Morgan Chase and
[[Bank of America]{.underline} ![](media/image13.png){width="0.21875in"
height="0.11388888888888889in"}](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3420108464&csi=8213&A=0.5964985387956963&sourceCSI=162599&indexTerm=%23CC0002PWF%23&searchTerm=Bank of America &indexType=C)

**Bank of America**  -Search using:

-   ![](media/image12.png){width="0.13472222222222222in"
    height="0.13472222222222222in"}[News, Most Recent 60
    Days](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3420108464&csi=8213&A=0.5964985387956963&sourceCSI=162599&indexTerm=%23CC0002PWF%23&searchTerm=Bank of America &indexType=C)

are all among the top 50 donors to federal candidates since 1989,
according to the Center for Responsive Politics, a non-profit group that
monitors political donations.

\*A few issuers have also become big players in presidential politics:
[[MBNA,]{.underline} ![](media/image13.png){width="0.21875in"
height="0.11388888888888889in"}](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3420108464&csi=8213&A=0.5964985387956963&sourceCSI=162599&indexTerm=%23CC0002PWF%23&searchTerm=MBNA, &indexType=C)

**MBNA,**  -Search using:

-   ![](media/image12.png){width="0.13472222222222222in"
    height="0.13472222222222222in"}[News, Most Recent 60
    Days](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3420108464&csi=8213&A=0.5964985387956963&sourceCSI=162599&indexTerm=%23CC0002PWF%23&searchTerm=MBNA, &indexType=C)

now part of [[Bank of
America,]{.underline}](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3420108464&csi=8213&A=0.5964985387956963&sourceCSI=162599&indexTerm=%23CC0002PWF%23&searchTerm=Bank of America, &indexType=C)

**Bank of America,**  -Search using:

-   ![](media/image12.png){width="0.13472222222222222in"
    height="0.13472222222222222in"}[News, Most Recent 60
    Days](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3420108464&csi=8213&A=0.5964985387956963&sourceCSI=162599&indexTerm=%23CC0002PWF%23&searchTerm=Bank of America, &indexType=C)

was one of President Bush\'s largest all-time donors, giving about
\$597,000 during his two campaigns.

The donors have gotten their money\'s worth. For years, Congress ignored
consumer outrage as the industry flooded the public with solicitations,
then squeezed customers with escalating fees and usurious rates.

Cardholders should, of course, take responsibility for their debts. But
the industry has found creative ways to raise rates, sometimes to more
than 30%, even for good customers, based on how they\'ve handled other
accounts. What the industry now calls \"risk-based\" re-pricing can be
triggered by changes in a consumer\'s credit score.

In recent years, penalizing customers for infractions \-- such as going
over limit or paying late, even by a minute \-- has become a huge profit
center. The industry is expected to collect \$19 billion in penalty fees
this year, a 79% increase since 2003.

Congress is finally starting to stir. In December, Sen. Carl Levin,
D-Mich., put banks on the hot seat at a hearing. On Thursday, Rep.
Carolyn Maloney, D-N.Y., proposed a sensible measure to curb some of the
abuses. Sen. Chris Dodd, D-Conn., who chairs the Senate Banking
Committee, promises to push similar changes.

But don\'t count the industry out. In Washington, it\'s far easier to
block something than to pass it. Voters should pay close attention this
year to who\'s trying to get the issuers to act more responsibly, and
who\'s defending some of their more outrageous practices.

**The News & Observer (Raleigh, North Carolina)**

**\
January 9, 2008 Wednesday\
Final Edition**

Plastic, but real\
\
**SECTION:** **EDITORIAL/**OPINION; Pg. A8\
\
**LENGTH:** 368 words

If the mortgage crisis hasn\'t been bad enough, now the nation is facing
a mountain of credit card debt. The Associated Press crunched data from
larger credit card issuers in the United States and found double-digit
increases in late payments and in accounts so far behind that companies
just wrote the debt off.

The blame can be placed partly at the feet of banks and card companies
themselves. Mortgage companies got into trouble when they used predatory
lending practices that were too good to be true for both parties, and
\"banked\" on a flourishing economy and steadily increasing incomes of
borrowers. Banks and credit card companies have offered customers many
millions of dollars in debt based on the same things.

The AP reported that the value of credit card accounts at least 30 days
late in October had jumped 26 percent compared to a year earlier, to
\$17.3 billion. The data came from 17 large credit institutions and
retailers, including Bank of America, Capital One, Wal-Mart and Home
Depot. Some companies reported increases of 50 percent and more in the
value of accounts at least 90 days late, a stunning jump. Debt
write-offs rose 18 percent, to nearly \$961 million. And the trend has
continued since October.

Buyer, or charger, beware is a good rule of the credit road, and
Americans to be sure have come to rely too much on credit. But it\'s
also become obvious that federal regulators haven\'t been tough enough
on the issuers. Card companies flood consumers with offers, often at
teaser rates, only to raise those rates dramatically a few months later.
It\'s a safe bet that some of the same consumers having trouble making
adjustable mortgage payments were offered credit cards.

Companies then impose grossly high fees for late payments and exceeding
one\'s credit limit. They may even impose a penalty interest rate
increase on borrowers who are current with their payments if, in the
card company\'s opinion, something has made the borrower less
credit-worthy. Terms may be disclosed, but in the fine print and often
in language so dense a lawyer might be confused.

While Congress considers new regulatory protections and disclosure rules
on mortgages, it ought to do the same with credit cards.

**The Olympian (Washington)**

**\
Distributed by McClatchy-Tribune Business News**

**\
January 2, 2008 Wednesday**

**EDITORIAL: Credit card** debt demands our attention\
\
**BYLINE:** The Olympian, Olympia, Wash.\
\
**SECTION:** COMMENTARY\
\
**LENGTH:** 529 words

Jan. 2\--The number of consumers in this country racking up credit card
debt and falling behind on their payments is at an all-time high.

It\'s a clear sign that the spending habits of many U.S. households are
out of control, exacerbated by the subprime mortgage crisis that reared
its ugly head last year.

The deteriorating household budgets could spell even more trouble ahead
for an economy already sputtering into the new year.

The start of a new year is a good time for individuals and families to
take a hard look at their credit card debt and take steps to reduce it,
through such measures as debt consolidation, reduced use of credit cards
and timely payment of their bills.

Just how deeply credit card debt problems permeate U.S. society is
visible on several fronts.

Discover Card is running a full-page advertisement in the national
media, telling Discover Card holders that they can earn a cash reward
equal to their monthly interest fee if they make timely payments on
their credit card debt six months in a row.

In other words, consumers have gotten so nonchalant about making their
credit card payments that they need to be enticed with rebates to get
back on track.

An Associated Press analysis of credit card data from the nation\'s 17
largest card issuers bears out how pervasive delinquent payments and
credit card defaults are across the country.

The value of credit card accounts at least 30 days late on their
payments climbed to \$17.3 billion in October 2007, a 26 percent
increase over the previous year.

Many of the major lenders also reported sharp rises of 50 percent or
more in accounts that were at least 90 days delinquent, compared with a
year ago.

And the value of defaults \-- that\'s where the lender gives up hope of
ever collecting \-- was up 18 percent over the same one-year period.

Some of the increases likely are byproducts of the subprime mortgage
crisis, but much of it is the result of a long entrenched habit of
consumers to spend, spend and spend some more with little regard for
what they truly can afford.

Many economists expect those numbers to climb even higher after a 2007
holiday shopping season built in part on credit card purchases.

For those who overextend their credit, bankruptcy is no longer a
ready-made solution to their financial woes. Changes in federal
bankruptcy law approved by Congress in 2005 make it harder for folks
with above-average income to write off their debts.

And lenders are less willing to approve home equity loans to consolidate
debt in the aftermath of the subprime mortgage mess, especially for
those with a poor credit history.

The message is clear: U.S. consumers can\'t keep spending like there is
no tomorrow. The use of credit cards has a role in a healthy economy,
but they should not be abused.

**Morning Call (Allentown, Pennsylvania)**

**\
December 28, 2007 Friday\
FIFTH Edition**

Personal Finance;\
Decreasing **credit card** debt would be a good New Year\'s resolution\
\
**BYLINE:** The Morning Call\
\
**SECTION:** Opinion; Pg. A6\
\
**LENGTH:** 501 words

Here\'s when the Grinch steals Christmas: When the credit card
statements arrive in the mail.

Earlier this week, the Associated Press reported that more and more
Americans are falling behind on their credit card bills. It\'s a credit
crisis rivaling the subprime mortgage mess that has roiled the global
financial markets this year.

Actually, the two credit problems are partially related. Credit card
delinquencies appear to be highest in states with the biggest subprime
mortgage concerns, according to AP.

According to a survey by [[Online Resources
Corp.,]{.underline}](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3420201016&csi=306888&A=0.057842676354464384&sourceCSI=162599&indexTerm=%23CC0008TXP%23&searchTerm=Online Resources Corp.,&indexType=C)

a Web-based financial services provider, one out of four American
households reports being delinquent on at least one bill by 30 days or
more. And, when people start experiencing trouble paying their bills,
Online Resources found they create a \"delinquency budget.\" Mortgages
get paid first. Other bills, such as credit cards, telephone, health
care and utilities, get put to the side.

Part of the problem is that Americans have come to believe debt is good.
It doesn\'t help that the federal government sets such a poor example.
And, the holiday season is the worst time of the year for credit card
debt. \"The desires of consumers to want, want, want, spend, spend,
spend \-- it\'s the fabric of our nation,\" says Florida credit
counselor Howard Dvorkin. Because of stricter bankruptcy laws, it\'s
more difficult for borrowers to walk away from their debt by filing
bankruptcy.

And, that debt is staggering. The Federal Reserve estimates that
Americans owe nearly \$1 trillion on their credit cards. Meanwhile,
delinquency rates are soaring and lenders wrote off nearly \$1 billion
in defaults in October, an increase of 18 percent over the previous
year, according to the Security Exchange Commission.

Much of this credit card debt has been repackaged into investments like
subprime mortgages have. And, this means the concern about the impact on
the economy could be even broader than first thought. Retail consultant
Howard Davidowitz predicts the economy is heading toward a \"massive\"
consumer-led recession.

What to do about it is the question. Newsletter publisher Mary Hunt says
people overspend because they don\'t want to feel poor. The problem, she
writes, \"is a state of mind.\" She suggests some simple remedies to at
least get out of the dead-end debt mentality.

Start, she says, by keeping your car clean, inside and out. Doing so
will help keep you from looking for a new car. Next, she suggests
getting rid of clutter in paperwork, closets and elsewhere. \"Clutter
invites chaos,\" she writes, \"which leads to depression and feelings of
deprivations.\" Last, she recommends hiding a \$100 bill deep in your
wallet \-- and then not spending it. You\'ll always have \$100 and might
start saving.

Advice like this won\'t make the credit crisis disappear. AP reports
that millions of Americans have racked up significant credit card debt.
But nothing changes until people decide to do something about it, one at
a time. It might make a good New Year\'s resolution.

**The Cincinnati Enquirer (Ohio)**

**\
December 27, 2007 Thursday\
Final Edition**

Charging our way to a disaster\
\
**SECTION:** **EDITORIAL**; Pg. 6B\
\
**LENGTH:** 484 words

Enquirer Editorial

In hardly the time it took to tear through the packages under the tree,
Americans\' holiday financial concerns shifted from retailers worrying
consumers weren\'t buying enough to consumers wondering how they\'ll pay
for all they bought.

Sobering up from holiday credit-card benders is nothing new for
Americans, but this year\'s economic hangover may last longer than ever
and have more serious side effects.

According to an Associated Press report, Americans went into this
shopping season behind on credit-card payments like never before. The
number of families at least 30 days behind jumped by 26 percent last
year, with the greatest increase coming in those more than three months
overdue.

Overall, Americans owe more than \$920 billion in credit card debt. The
average family carries more than \$8,000 in such debt.

But more troubling than how much Americans owe is what they\'re flashing
that plastic for. A growing number of families use credit cards just to
make ends meet. The AP report suggests that growing mortgage problems,
shrinking home values and a weakening job market are forcing families to
charge necessities, like food and tuition.

With credit card interest rates as high as 36 percent and a host of
surcharges, it\'s easy for families to dig themselves into a hole they
can\'t climb out of. Last year, Americans defaulted on \$961 million in
credit card debt, an 18 percent increase from the previous year.

Money problems lead to increased stress and family conflict. They
truncate career aspirations. They exacerbate mental health problems.
They rob families of vacations and leisure activities that bonds and
memories are made of.

The credit card industry is a lucrative one, last year generating
profits of more than \$30 billion before taxes. It also serves
Americans\' predilection for financial flexibility - and impulse buying.
For both reasons, credit cards are not going away. The question is how
to limit their potential for harm.

One step is reform in the credit card industry. Like the mortgage
industry, it\'s flush with deceptive tactics, including terms that can
change at any time for any reason, and penalties sometimes triggered by
a payment even a few hours late.

The second is for consumers to exert a new measure of self-discipline -
always hard to do but never more so than while they struggle with
shifting mortgage rates and job uncertainties.

Young people need to grow up with good financial instruction. Colleges
need to help young adults manage, rather than jump into, early
credit-card debt. And adults need access to financial counseling before
they\'ve spent themselves into a corner.

Credit cards, we should all remember, make useful servants but terrible
masters.

What do you think?

Did you overextend yourself with Christmas spending this year? E-mail
your response to
[[letters@enquirer.com]{.underline}](mailto:letters@enquirer.com), or
mail to Letter to the Editor, 312 Elm St., Cincinnati OH, 45202.

**THE SEATTLE POST-INTELLIGENCER**

**\
December 26, 2007 Wednesday**

CREDIT BINGE: IT\'S THE DAY AFTER\
\
**SECTION:** **EDITORIAL**; Pg. B6\
\
**LENGTH:** 267 words

The day after Christmas can be a challenge in more ways than one.
Perhaps you\'re fighting the crowds to make your way back home from a
family visit, or maybe you\'re just working to shake off the food coma
into which you drifted after last night\'s feast.

Whatever the case, we hope you\'re not coping with a major shopping
hangover. The Associated Press reports that Americans are falling behind
on making credit card payments \"at an alarming rate, sending
delinquencies and defaults surging by double-digit percentages in the
last year and prompting warnings of worse to come.\"

An increasing number of credit card users have entered the category of
debtor who are more than 90 days late in paying off outstanding
balances. Credit card delinquencies are up 26 percent over a year ago,
reports the news wire service, which analyzed credit card data and found
a link between this unsettling trend and the subprime mortgage crisis.
The thinking is that squeezed families trying to make their mortgage
payments are increasingly turning to credit cards to pay for food and
tuition. Sometimes, credit card debt drives folks to borrow more against
their homes to make payments to the Lords of Plastic. Another factor
contributing to the problem is that apparently, Americans aren\'t afraid
of high-interest debt. This attitude needs to change.

We need to go back to becoming a nation of savers, not spenders. Don\'t
worry; the economy will not come to a screeching halt. So unless you
truly need something - or are flush enough to afford whatever catches
your eye - may we advise that you skip the post-Christmas sales?

**Grand Rapid Press (Michigan)**

**\
December 15, 2007 Saturday\
ALL S EDITION**

Unfair **credit card** practices keep people in debt\
\
**SECTION:** **EDITORIAL**; Pg. A13\
\
**LENGTH:** 665 words

Janet Hard is a registered nurse, married, with two children living in
the Saginaw area. She has had a Discover credit card for years, has
always paid her bills on time, never exceeded the credit limit, and
always paid at least the minimum amount due. Over the last 12 months,
Ms. Hard spent less than \$100 on purchases and made steady monthly
payments of \$200 for a total of \$2,400 in payments on her card.
Shockingly, over this same period of time, Ms. Hard\'s \$2,400 in
payments reduced her debt by only \$350.

How could \$2,400 result in only a \$350 reduction of Ms. Hard\'s credit
card debt? In 2006, out of the blue, Discover increased the interest
rate on her card from an already high 18 percent up to 24 percent.
Discover then retroactively applied this sky-high 24 percent rate to her
existing credit card debt of \$8,300, increasing her finance charges and
minimum payments. Even though Ms. Hard had not missed a payment to
Discover and made all her payments on time for 48 months, she was still
penalized.

The Senate Permanent Subcommittee on Investigations, which I chair, held
a hearing this month on credit card companies that hike the interest
rates of hard working Americans, like Ms. Hard, who play by the rules.

It is the second in a series of hearings I am holding on unfair credit
card practices. In March, we looked at a number of industry practices
that seem rigged to keep families mired in debt. These practices include
charging interest on payments made on time, imposing excessive and
duplicative fees, and applying consumer payments first to the debt with
lowest interest charges instead of to the debt with the highest interest
charges.

Our hearing this week was the result of an investigation into unfair
interest rate increases that uncovered some surprising facts. We learned
that a consumer\'s credit score may drop for unspecified reasons,
resulting in interest rate increases. The major credit card issuers
often increase interest rates even though a cardholder has maintained a
perfect payment history on their credit card.

We learned that the vast majority of the decisions to increase credit
card interest rates are not made by credit card company employees, but
by automated computer programs. These programs use complex mathematical
formulas based on information about consumer credit scores, making them
difficult to understand. And we learned that credit scores can be
lowered if a consumer gets close to but does not exceed their credit
limit or if the consumer opens new a credit card just to obtain a
discount on a purchase.

We also saw plenty of evidence of arbitrary interest rates. One
consumer, for example, had a Chase credit card that, in the last 12
months, had four different rates: 15 percent, 17 percent, 27 percent and
\-- after my subcommittee asked about the account \-- 6 percent. These
interest rates are all over the map.

Our investigation has already led some credit card companies to change
their practices to be fairer and more consumer-friendly. Citi and Chase,
for example, both recently decided to discontinue the practice of
imposing interest rate increases on cardholders who meet the credit card
issuer\'s obligations.

I hope others will follow suit, but we need more than voluntary action;
we need to change regulations or law to prohibit unfair practices. That
is why I have introduced the Stop Unfair Practices in Credit Cards Act,
which would put an end to a variety of unfair credit card practices that
make it difficult for working families to climb out of debt. The bill
has been endorsed by the leading consumer groups and co-sponsored by
eight other senators.

Folks who meet their credit card obligations \-- pay their bills on
time, stay under their credit limits and pay at least the minimum amount
due \-- should not be hit with massive interest rate increases out of
the blue. Credit card companies are too often squeezing and even gouging
working families that play by the rules. It is time for Congress to say
enough is enough.

**The Providence Journal (Rhode Island)**

**\
December 15, 2007 Saturday\
All Editions**

**EDITORIAL** - Problematic plastic\
\
**SECTION:** **EDITORIAL**; Pg. F-02\
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**LENGTH:** 370 words

In recent months, Congress has been shedding some welcome light on the
multibillion-dollar credit-card industry, and its frequently abusive
practices. One of the most egregious has been the raising of interest
rates on customers who pay on time but who, usually unknown to them,
have had a decline in their credit scores. Sometimes, simply opening a
new department-store account is enough to trigger the change.

In testimony earlier this month before a Senate subcommittee, consumers
told of baffling increases, some to as high as 30 percent, in the rates
applied to their credit cards. (Whatever happened to the usury laws?) In
no time, consumers subject to such rates can find that their credit-card
payments are going mostly to interest, leaving their balances largely
untouched.

[[Sen. Carl
Levin]{.underline}](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3419923989&csi=146817&A=0.3207827860449691&sourceCSI=9369&indexTerm=%23PE0009V1U%23&searchTerm=Sen. Carl Levin &indexType=P)

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(D.-Mich) hopes that by exposing this and other practices, Congress can
shame credit-card companies into better behavior. And in fact, three of
the largest credit-card companies (Citibank, Chase and Capitol One) have
now pledged not to alter interest rates for customers whose credit
scores change. Others, such as Bank of America and Discover, are holding
out, however.

It would be much better for consumers, and fairer all round, if the
practice of tying rates to falling scores were legally prohibited. As
[[Senator
Levin]{.underline}](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3419923989&csi=146817&A=0.3207827860449691&sourceCSI=9369&indexTerm=%23PE0009V1U%23&searchTerm=Senator Levin &indexType=P)

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pointed out, this is a simple matter of the credit-card company\'s
holding up its end of the contract with its customer.

Unfortunately, raising interest rates because of credit-score changes is
just one of many \"gotcha\" strategies the credit-card companies use to
rake in extra profits. Increasingly, systems for trapping and penalizing
customers seem to be the name of the game. A recent study by the
Government Accountability Office found that, in the 10 years between
1995 and 2005, average credit-card fees had tripled.

Currently, Americans carry some \$900 billion in credit-card debt, an
average of about \$2,200 per household. At a time when many are
struggling to hang onto their homes, and delinquencies on car loans are
also rising, credit cards have become even more of a minefield than they
were. Predatory practices should not be allowed to drag the troubled
consumer economy deeper into a hole.

**The Columbus Dispatch (Ohio)**

**\
December 12, 2007 Wednesday\
Home Final Edition**

Play fair;\
**Credit-card** issuers should not penalize customers who pay their
debts on time\
\
**SECTION:** **EDITORIAL** & COMMENT; Pg. 14A\
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**LENGTH:** 370 words

Last week, for the second time this year, the major banks that issue
credit cards were taken to task by Congress for business practices that
prey upon customers who have done nothing wrong.

The congressional inquiry highlighted one practice in particular: People
who pay their credit-card bills on time every month sometimes find their
interest rates increased because their credit scores declined for other
reasons. The rationale is that, regardless of a credit-card customer\'s
record of paying on time, he has become a greater credit risk.

But credit scores can be lowered because of any number of factors that
don\'t indicate financial distress, one being that the customer has
opened other credit-card accounts.

Sen. Carl Levin, D-Mich., summed up the situation well: \"When a
credit-card issuer promises to provide a cardholder with a specific
interest rate if they meet their credit-card obligations, and the
cardholder holds up their end of the bargain, the credit-card issuer
should have to do the same.\"

Americans have run up \$900 billion in credit-card debt, averaging
\$2,200 per household. Some of the spending is by people living caviar
lifestyles on canned-tuna incomes, but a good deal of it comes from the
pressure of everyday expenses. Health-care and energy costs are high,
squeezing people\'s budgets from all sides.

The last thing that customers who pay their credit-card bills deserve is
for creditors to arbitrarily increase an expense for which they get
nothing in return. Banks that do so are preying on diligent customers,
the kind they claim to value.

The threat of legislation appears to have made a difference. After
Congress gave the credit-card companies the first stern talking-to in
March for questionable practices, Citigroup stopped raising rates based
on credit scores. This time around, [[JPMorgan
Chase]{.underline}](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3419939121&csi=143930&A=0.5703188404579773&sourceCSI=162599&indexTerm=%23CC00027NH%23&searchTerm=JPMorgan Chase &indexType=C)

JPMorgan Chase  -Search using:

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announced plans to discontinue the practice in March 2008. Capital One
Financial Corp. says that it never has engaged in this practice.

So, of the five companies that issue 80 percent of the country\'s credit
cards, the lone holdouts are Discover Financial Services and Bank of
America Corp. Congress should tighten the screws, and smaller banks
likely will follow the lead of the big ones. {SEND}

**USA TODAY**

**\
December 11, 2007 Tuesday\
FINAL EDITION**

Credit issuers jack up rates, even if you pay on time\
\
**SECTION:** NEWS; Pg. 10A\
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**LENGTH:** 524 words

Bonnie Rushing, a paralegal in Naples, Fla., sounds like just the sort
of customer any bank would want to cultivate. She told Congress last
week that she has never missed or even been late on her credit card
payments, despite a financial setback last year.

Her reward for being responsible? Last April, the rate on her Bank of
America credit card shot up from 7.9% to nearly 23% \-- and the tripled
rate applied not just to new purchases but to her entire balance.

Rushing, like thousands of other consumers, fell victim to the ability
of banks to raise credit card rates \"at any time for any reason.\" Yes,
that\'s what the law allows.

In this case, Bank of America raised Rushing\'s rate because her credit
score fell, she had taken on more debt and was making only her minimum
payments, the president of Bank of America Card Services testified.

That\'s akin to a mortgage holder tripling your mortgage rate, not
because you paid late or less than what you owed, but because you bought
a new car on credit. Banks couldn\'t do that unless you had agreed to
such absurd terms in the loan papers you signed. But credit cards exist
in their own world, where laws and regulations have long been crafted to
benefit the issuers, not the consumers.

For years, most major issuers took advantage of such laws to raise rates
even for good customers, based on the way they handled other accounts
\-- a practice known as \"universal default.\" But the banks took so
much heat from consumer groups over this egregious practice that some
banks declared universal default was dead. In reality, all that changed
was the name. Now the industry talks about \"risk-based\" pricing, often
using changes in credit scores to trigger hikes.

Are the issuers embarrassed about this? Hardly. Discover and Bank of
America acknowledged unashamedly that they raise rates based on
customers\' behavior with other creditors. \"Not using a cardholder\'s
behavior on their other debts \... is like taking the batteries out of
the smoke detector,\" Discover President Roger Hochschild asserted in
congressional testimony.

Raising rates on future purchases is understandable when risk rises, but
doing so on past debt is abusive.

For years, Congress ignored consumer outrage over such practices. Now,
with Democrats in control and investigating these abuses, a few issuers
have made changes.

But as long as some banks defend this and other unseemly practices \--
such as penalty rates as high as 32% and abusive fees \-- Congress needs
to get involved.

Sen. Carl Levin, D-Mich., has proposed a sensible measure that would
curtail abuses: It would prohibit imposing new, higher interest rates on
old balances and limit increases on a customer\'s rate. If members of
Congress want to show whose side they are on, they should pass this
proposal by the end of the holiday shopping season.

Rushing did manage to regain her 7.9% rate, but not without a fight. She
wrote to Florida\'s attorney general and Levin\'s Senate subcommittee.
She called AAA, her card\'s sponsor, and it intervened on her behalf.

There\'s something wrong when consumers who pay their bills on time must
go to such lengths to protect themselves.

**The Detroit News (Michigan)**

**\
December 11, 2007 Tuesday**

**Credit card** users deserve prompt notice of rate hikes\
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**SECTION:** **EDITORIALS**; Pg. 10A\
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**LENGTH:** 468 words

U.S. [[Sen. Carl
Levin]{.underline}](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3420035528&csi=255260&A=0.8240394713255415&sourceCSI=9369&indexTerm=%23PE0009V1U%23&searchTerm=Sen. Carl Levin &indexType=P)

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has doggedly uncovered a slew of unfair and suspect practices in the
credit card industry. The Michigan Democrat wants satisfactory responses
from banks but is also ready with tougher consumer protection laws if
needed.

Levin recently exposed companies that jack up interest rates on loyal
customers who never miss a payment. Testimony before Congress
illustrates the problem:

In Milwaukee, a senior on a fixed income had for years faithfully paid
\$119 a month on a closed account but his rate jumped 15 percent to 27
percent. As a result, his payments over a year did not reduce the debt
at all, said Levin, chairman of the Senate\'s Permanent Subcommittee on
Investigations, which is probing such practices.

A Florida woman watched her rate nearly triple to 23 percent from about
8 percent even though she had paid her credit card bills on time for
years. A computerized credit rating system had churned out a lower score
for the woman. And without notifying her ahead of time, the bank
unilaterally hiked the rate.

However, the bank restored the woman\'s original 8 percent rate after
she wrote to Levin\'s committee and to the Florida attorney general. The
change of heart, of course, came after heavyweight public officials got
involved.

Banks say they set rates based on risk, assessed by computer analysis of
credit rating and other factors. But sometimes no rhyme or reason can be
discerned. Levin\'s panel turned up a woman who has four credit cards
from the same company and each has a different interest rate: 8 percent,
14 percent, 19 percent and 27 percent. That makes it four different
rates for a woman who, logically, can have only a single credit rating.

At a minimum, customers with a good payment record should not get nailed
for higher interest rates without notice and without easy appeal.
\"Buyer beware\" is a fine adage. But it doesn\'t justify predatory
business practices.

In an earlier probe, Levin was credited with forcing a company to end
\"universal default,\" in which interest rates were raised because of a
customer\'s later payment to another creditor.

Consumers are entitled to know the terms of their credit card agreements
at all times and have a clearly described path to challenging any
negative information that might cause a rate hike. This requires prior
notice of any rate increases.

That\'s a good basis for banks to reassess their policies or for a
rewrite of U.S. lending law.

Example of rate hike effect

What happened to the amount of debt one credit card customer owed after
the interest rate increased from 15 percent to 27 percent:

October 2006

Amount owed: \$4,800

Total interest charges: \$1,100

Total fees: \$200

Total purchases: \$0

October 2007

Amount owed: \$4,800

Total payments: \$1,300

Reduction in debt: 0

Source: U.S. Senate Permanent Subcommittee on Investigations

**Detroit Free Press (Michigan)**

**\
December 9, 2007 Sunday\
METRO FINAL Edition**

MINIMUM DUE: FAIRNESS;\
CREDIT CARD COMPANIES MUST END DECEPTIVE PRACTICES OR FACE TIGHTER
REGULATION\
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**SECTION:** EDP; EDITORIAL; Pg. 1\
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**LENGTH:** 837 words

It was not easy for Janet Hard to air her family\'s financial laundry in
the very public setting of a U.S. Senate hearing last week. But the
Freeland, Mich., woman helped expose one of the more onerous and
underpublicized practices of credit card companies.

A registered nurse who has chosen to give up an income and be a
stay-at-home mom to her two teen sons, Hard, 42, told U.S. [[Sen. Carl
Levin]{.underline}](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3420119715&csi=247193&A=0.905186107222322&sourceCSI=9369&indexTerm=%23PE0009V1U%23&searchTerm=Sen. Carl Levin&indexType=P)

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\'s investigations subcommittee how she and her husband, Bill, a
steamfitter/welder, \"used credit cards to make ends meet when we needed
to.\"

\"Maybe this wasn\'t the best decision,\" she said. \"Maybe we could
have been more frugal with our money, but we were paying our bills on
time and keeping our heads above water.\"

Then Hard noticed that despite always paying more than the minimum
balance on a Discover card, she was hardly denting the balance. A check
with the company revealed Discover had raised her interest rate from 18%
to 24.4% after deciding, based on a credit check, the Hards were
becoming a higher risk. Based on what? Other credit card debts and
available balances on inactive accounts. As a result, \$176 of every
\$200 Hard was sending in was going for interest.

\"When I look at the money we have paid in interest, I feel sick,\" Hard
said. \"\... We were never expecting to shirk our debt. \... We held up
our end of the agreement but have found that they have been able to
change the rules to benefit themselves.\"

This is just one of the unfair credit card practices that have come to
light in the past year, chiefly because of Levin\'s subcommittee work.
Michigan\'s senior senator deserves credit for the exposure that already
has driven some changes in the industry. But Levin clearly needs to
wield the hammer of more federal regulation if other practices are not
stopped.

At the very least, credit card companies should have to adhere to some
standards for notifying their customers of alterations in credit
agreements. Letters with pages of complex terms in tiny print - several
examples were read at the hearing - are obviously designed to be ignored
by consumers who are just glad they\'re not getting another bill.

How about requiring a message in big letters on the envelope (or atop
the e-mail, for folks who pay bills that way) that says: NEW TERMS FOR
YOUR CARD and that the largest type in the text must be: YOUR OLD RATE
WAS XX%; YOUR NEW RATE IS XX%.

Is that too much to ask?

The bottom line on credit cards is still caveat emptor. The best advice
is still to use them carefully and pay the balance each month. But
that\'s not always possible. The average U.S. household now carries
\$2,200 in credit card debt. The national total is \$900 billion, and
that will certainly be higher once the holiday shopping season ends.
Credit card spending is crucial to the U.S. economy. But there\'s also a
fairness issue.

\"When a credit card issuer promises to provide a cardholder with a
specific interest rate if they meet their credit card obligations, and
the cardholder holds up their end of the bargain, the credit card issuer
should have to do the same,\" Levin said.

Credit card companies say they have to be concerned with credit risk and
keep tabs on the status of their customers. But maybe they shouldn\'t
invite so much risk by so aggressively marketing credit cards to people,
many of whom have no idea how to manage money. Maybe the companies
shouldn\'t be encouraging people to swipe their credit cards everywhere
for everything, even to the point of TV commercials that mock people for
holding up the line by paying cash.

A recent congressional study also found that about a third of credit
card users make at least one late payment a year, and late fees have
risen way faster than inflation, from an average of \$13 in 1995 to \$34
by 2005.

Janet Hard says her moment in the national spotlight at the Senate
hearing \"felt like a lot longer than 15 minutes.\"

\"The toughest part was that feeling like you were in a public
confessional,\" she said. But Hard also is hearing from people with
similar stories. And

countless more have surely checked

their most recent credit card statements after hearing what happened to
her.

So kudos to Janet Hard. And let the credit card industry take note:
It\'s time to be as bold about terms and billing as you are at enticing
people to use plastic.

CREDIT CARD ISSUES? HERE ARE OPTIONS

\*If you have questions or problems, contact the card issuer. Be sure to
get the names of people with whom you speak. Take notes, including the
times of your conversations.

\*Consumer Action is an advocacy group. Call 415-777-9635 or e-mail
[[hotline@consumer-action.org]{.underline}](mailto:hotline@consumer-action.org)
It may take a few days to get a response.

\*The office of U.S. [[Sen. Carl
Levin]{.underline}](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3420119715&csi=247193&A=0.905186107222322&sourceCSI=9369&indexTerm=%23PE0009V1U%23&searchTerm=Sen. Carl Levin &indexType=P)

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is gathering e-mails on credit card issues at
[[creditcards@hsgac.senate.gov]{.underline}](mailto:creditcards@hsgac.senate.gov)

**The Roanoke Times (Virginia)**

**\
December 7, 2007 Friday\
Metro Edition**

CRAZY CREDIT\
\
**SECTION:** **EDITORIAL**; Pg. B10\
\
**LENGTH:** 344 words

Credit card companies would have customers believe that raising the
interest rate on card balances as their credit scores fall is a
necessary practice.

Customers might buy that, if the practice worked both ways: score drops,
interest rate rises; score rises, interest rate drops.

If only.

The industry has been taking its whacks this week before a Senate panel.
The Senate Permanent Subcommittee on Investigations is examining
companies\' practice of spontaneously checking customers\' credit
ratings to determine if they\'ve slipped and pose a greater risk to
lenders.

Companies defend the practice as sensible business. Besides, cardholders
are notified before higher rates kick in, they said.

But one woman told the subcommittee that her Discover card interest rate
rose from 18 percent to 24.24 percent after the company ran a credit
report and determined her family was at higher risk of defaulting on
payments. She learned of the rate increase only after calling Discover.

Of the \$5,600 the family made in card payments over a two-year period,
nearly \$3,500 went to interest, The Associated Press reported. Of
monthly \$200 payments, \$176 went to finance charges. And this family
had made all of its payments on time.

The woman said she felt robbed. She should.

She should feel as violated as if a thief had climbed through her dining
room window, rifled through her china cabinet and left with an armload
of heirloom silver \-- but had told her beforehand that he\'d be
dropping by.

At the very least, the credit card companies\' practice is questionable.
Is peering spontaneously at credit reports an effort to minimize risk,
or snooping for another way to profit?

To the industry\'s credit, pardon the pun, several companies have vowed
to discontinue the practice \-- or already have done so.

Others should follow their lead. Regardless, Congress must support
proposed measures to clamp down on the industry, such as a bill that
would restrict interest rate increases.

The road to debt recovery is tough enough without bold, but
surreptitious, tinkering by credit card companies.

**Lancaster New Era (Pennsylvania)**

**\
December 6, 2007 Thursday**

Raising rates when credit scores fall\
\
**BYLINE:** Editorials\
\
**SECTION:** A; Pg. 6\
\
**LENGTH:** 664 words\
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**DATELINE:** Lancaster, PA

[[Sen. Carl
Levin]{.underline}](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3420003291&csi=230176&A=0.18104741137934732&sourceCSI=9369&indexTerm=%23PE0009V1U%23&searchTerm=Sen. Carl Levin &indexType=P)

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(D-Mich.) did a pretty good job of portraying the nation\'s credit-card
issuers as the Grinch who is stealing Christmas from unsuspecting
cardholders.

Levin, chairman of a subcommittee of the Senate Committee on Homeland
Security and Governmental Affairs, hauled executives of top credit-card
companies before his panel on Tuesday.

Also appearing were customers who had their relatively low interest
rates hiked sharply - to as much as 27 percent - even though they were
paying their balance on time every month.

It\'s an industry practice known as \"risk-based pricing,\" where
companies factor into the interest rate the probability of a borrower
defaulting.

Repeatedly late payments are the most common reason for raising a
customer\'s credit-card rate. But a drop in a customer\'s credit score
is enough for some companies to do it, too.

Levin criticized the reliance on credit scores, saying it harms many
customers who otherwise were meeting their credit-card obligations.

Chase and Bank of America are two of the larger financial companies that
use credit scores to determine interest rates. [[JPMorgan
Chase]{.underline}](http://w3.nexis.com:80/new/search/XMLCrossLinkSearch.do?bct=A&risb=21_T3419862629&returnToId=20_T3420003291&csi=230176&A=0.18104741137934732&sourceCSI=162599&indexTerm=%23CC00027NH%23&searchTerm=JPMorgan Chase &indexType=C)

& Co., Citigroup Inc. and Capital One use only only a customer\'s
previous payment history.

Between them, these companies issue 80 percent of America\'s credit
cards.

\"December is a big shopping month. Stores, advertisers and sometimes
even the president are urging shoppers to spend more.\" Levin said.
\"But if you shop with a credit card, as most Americans do, dangers lurk
that few consumers realize could damage their financial future.\"

Sen. Norm Coleman (R-Minn.) argued that \"clear, user-friendly
disclosures and common sense, straightforward alerts to changes in a
card\'s terms\" would go a long way to addressing the problem.

Cardholders aren\'t the only ones upset with the credit-card industry.
Retailers complain of the \"interchange fee,\" a hidden fee which they
say jacks up the price of merchandise for all customers, even those who
use cash only.

Credit-card executives, meantime, defended the risk based pricing
system.

If credit-card companies aren\'t able to monitor their customers\'
credit, one executive warned, they could end up in a crisis similar to
the one facing the subprime-mortgage industry,

\"Attempts to interfere with the market here \... will inevitably result
in less credit being offered,\" said Bruce L. Hammonds, Bank America\'s
president of card services.

This isn\'t the first time Levin has tackled this issue. Following a
similar hearing in March, he introduced legislation that restricts the
ways credit-card issuers can increase interest rates.

But more legislation isn\'t the answer.

Credit-card companies are in a position now to make the necessary
changes - without further interference from the government.

One area to look at is the credit score. A customer who faithfully keeps
up on his credit-card payments should not be penalized because his
credit score drops. Companies should rely only on a customer\'s payment
history when considering whether to adjust interest rates.

Also, credit-card companies could notify cardholders sooner about
changes to their interest rates and provide for a process for appeal
that is more than just lip service.

And companies could provide much clearer information on the fees they
charge.

As Coleman suggests, there are things the companies can do to make their
policies more transparent and predictable.

America is swimming in \$900 billion in credit-card debt - \$2,200 per
household. The vast majority of cardholders pay their credit-card bills
regularly and promptly.

Additional federal regulation won\'t prevent the relatively few
cardholders from making bad financial decisions.

At the same time, credit card companies must recognize that it\'s in
their best interest to be transparent in their dealings with all
customers.

A lot of this could be avoided, incidentally, if cardholders would
discipline themselves to not take on more credit debt than they can
afford and to pay off their bill each month - in full.

**The Baltimore Sun**

**\
December 6, 2007 Thursday\
FINAL EDITION**

CREDITORS AND PREDATORS\
\
**SECTION:** **EDITORIAL**; Pg. 20A\
\
**LENGTH:** 401 words

Janet Hard of Freeland, Mich., couldn\'t understand why she and her
husband were paying more than the minimum balance on their Discover
credit card - adding only an \$8 Internet fee each month - but the
amount they owed did not seem to decrease at all. As Mrs. Hard testified
before a congressional subcommittee this week, it turned out that the
interest rate they were being charged was a whopping 24.24 percent,
based on an arbitrary determination Discover card services had made
about the ability of the couple - a stay-at-home mother of two and her
steamfitter husband - to pay.

Mrs. Hard\'s and similar horror stories are part of an ongoing, and
long-overdue, look by the Senate Permanent Subcommittee on
Investigations into questionable practices by credit card companies. At
the least, credit card companies need to re-examine those practices,
make better judgments about individual customers and be more open and
transparent - or rightly risk legislative corrections.

The hearing exposed consumer complaints of insufficient or
indecipherable notices of higher interest rates or other repricing
changes on accounts; of interest rate increases applied to existing as
well as new balances; and of unhelpful, even hostile, customer service
workers. In a heartbreaking moment, Mrs. Hard described paying Discover
\$5,618 over a two-year period - of which \$3,478.39 was interest.

Some card industry representatives tried to justify their \"risk-based
pricing\" as a necessary tool of adjustment when customers\'
circumstances change. But standards of assessing customer risk are often
too rigid.

There are inherent pitfalls in taking on revolving, unsecured credit
card debt, but the process doesn\'t need to be as arbitrary and obscure
as some companies make it. And there should be no excuses for jacking up
interest rates or imposing other penalties when customers pay on time,
pay at least the minimum balance and otherwise abide by the agreed-upon
terms when they were approved for the card.

The Senate subcommittee\'s spotlight on credit card companies has helped
push some companies to make voluntary changes that have benefited
customers, such as greater notice of pricing changes, more flexibility
to reject the changes and other customer-friendly assistance in managing
accounts. If card companies don\'t want Congress to saddle them with new
rules, they need to adopt more consumer-oriented policies on their own.

**PR Newswire**

**December 4, 2007**

**HEADLINE:** Merchants Applaud Senate Scrutiny of Credit Card Fees\
\
**DATELINE:** WASHINGTON Dec. 4\
\
**BODY:**\
\
\
WASHINGTON, Dec. 4 /PRNewswire-USNewswire/ \-- The Merchants Payments
Coalition is encouraged by a congressional hearing calling into question
unfair credit card practices. Today\'s hearing, held by the Senate
Permanent Subcommittee on Investigations, is among several held this
year that are scrutinizing the unfair practices imposed on consumers and
merchants by credit card companies.\
\
\"This hearing is another example of how serious the issue of **credit
card abusive** practices is for everyone,\" said MPC Chairman Mallory
Duncan, senior vice president and general counsel at the National Retail
Federation. \"The credit card industry has profited from outrageous
fees, and congressional attention is beginning to shed some light on a
broken system.\"\
\
One of the most outrageous fees most people have never heard of is the
\"interchange\" fee, a percentage of each transaction that Visa and
MasterCard along with their member banks collect from retailers every
time a credit or debit card is used to pay for a purchase. The fee
varies with type of merchant, transaction and card, but averages close
to 2 percent per transaction.\
\
Unlike other credit card fees, credit card companies don\'t show
interchange on monthly statements while their rules make it virtually
impossible to show it on receipts and make cash discounts very difficult
to offer. Instead, stores are effectively required to include the fee in
the price of merchandise, meaning higher prices for all customers, even
those who pay by cash or check. The hidden fee cost consumers and
merchants \$36 billion last year and is expected to top \$40 billion
this year.\
\
Earlier this year, the Senate Banking Committee held a hearing on the
billing, marketing and disclosure practices of the credit card industry.
In addition, Duncan testified on behalf of the MPC during a July hearing
on credit card interchange held by the House Judiciary Committee\'s
Antitrust Task Force. Duncan argued that Visa and MasterCard practices
in setting interchange rates have constituted a violation of federal
antitrust laws. MPC advocates a payment system that is transparent and
open to competition.\
\
The MPC is a group of nearly 30 associations representing retailers,
supermarkets, drug stores, convenience stores, fuel stations, on-line
merchants and other businesses that accept debit and credit cards
fighting for a more competitive and transparent card system that works
better for consumers and merchants alike. The coalition\'s member
associations collectively represent about 2.7 million stores with
approximately 50 million employees. For more information, visit
[http://www.unfaircreditcardfees.com](http://www.unfaircreditcardfees.com/)/
.

> **The Myrtle Beach Sun-News (South Carolina)**
>
> **\
> November 10, 2006 Friday**
>
> **Credit** cards carry hidden fees\
> \
> **BYLINE:** Susan Tompor, Detroit Free Press\
> \
> **SECTION:** D; Pg. 2\
> \
> **LENGTH:** 527 words
>
> **1/83/8**
>
> Imagine that you just picked up a terrific pair of Lacoste sneakers on
> sale. Then, the phone rings a month or two later. The store is
> demanding that you hand over more money for the same shoes sitting in
> your closet.
>
> Crazy talk, huh?
>
> That\'s how it works in the whacked-out world of credit card
> companies. They\'ve got ways to zing you even when you think you\'re
> in the clear. Amazingly, they\'re getting away with it.
>
> For now.
>
> It\'s getting harder - some might say downright impossible - to be
> savvy when it comes to credit cards.
>
> It is true many credit cards no longer charge annual fees. And many
> consumers are paying lower rates than they would have in 1990 or
> earlier.
>
> New research by the Government Accountability Office, the
> investigative arm of Congress, shows that many consumers have
> benefited from some risk-based pricing that allows credit card issuers
> to offer better rates to financially solid customers.
>
> Yet any savvy consumer knows it\'s way too easy to get caught in some
> trap.
>
> Did you know that your interest rate on some credit cards could go
> up - without any warning letter - if you pay your insurance bill late
> or start charging too much on all your credit cards? And that higher
> rate - sometimes 30 percent - could apply to old charges?
>
> Or did you know that you could be charged \$10 to \$15 if you want to
> pay your bill on time, but by phone?
>
> \"One way or another, these excesses and unfair practices have got to
> end,\" said U.S. Sen. Carl Levin, who requested the GAO\'s detailed
> study of disclosures, fees, interest rates and billing practices in
> the credit card industry.
>
> The Michigan Democrat told me in an interview that he\'s so concerned
> about the lack of consumer protections that he would introduce a bill
> to call for more credit card regulation if the industry doesn\'t take
> action itself.
>
> Levin said some practices should be prohibited, such as fees to pay by
> phone.
>
> \"I don\'t think you ought to be charged a fee if you pay on time,\"
> Levin said.
>
> Levin also said consumers shouldn\'t be charged interest on part of a
> bill that\'s already been paid.
>
> Consider double-cycle billing, a practice that a few credit card
> issuers use. It allows credit card issuers to charge interest on money
> that the consumer has technically borrowed but already repaid.
>
> \"It\'s not fair, and it should be banned,\" said Travis Plunkett,
> legislative director for the Consumer Federation of America in
> Washington, D.C.
>
> The GAO report offers this example: A cardholder spends \$1,000. Maybe
> he or she buys one big-ticket item, like a new washer, and some other
> everyday goods.
>
> And say the customer pays, on time, \$990 of that \$1,000 bill. The
> \$10 balance is carried over into the next month.
>
> How much would the cardholder owe in interest?
>
> With single-cycle billing, the GAO report notes that the cardholder
> would owe 11 cents in interest charges on that \$10.
>
> Under double-cycle, he or she would owe \$11.02 in interest charges.
> The cardholder would be paying interest on the money that was paid on
> time, as well as the \$10.
>
> Consumers who are hurt most by this practice are those who regularly
> pay their bills in full, but then charge a big-ticket item and pay it
> off in three or four months.

**The New York Times**

**\
October 5, 2007 Friday\
Late Edition - Final**

Common Sense and Credit Cards\
\
**SECTION:** Section A; Column 0; **Editorial** Desk; **EDITORIAL**; Pg.
24\
\
**LENGTH:** 319 words

After years of looking the other way, Congress seems finally poised to
rein in the predatory practices that have become all too common in the
credit card business. Several bills now pending would outlaw unfair
billing practices, like the one known as universal default, under which
a late payment on an unrelated bill \-- a utility bill, for example \--
allows credit card companies to raise their interest rates through the
roof. Other legislation would place limits on the way companies market
to college students.

All too often, these companies sometimes deluge students with cards,
even when they have no verifiable income, luring them and sometimes
their families into debt. Under pending bills, the companies would be
forced to consider a student\'s ability to pay and could extend no more
than a single card to a student with no income. In cases where parents
are jointly liable, the spending limit could be raised only with
parental approval.

These common sense measures are a good start. The politically powerful
credit card industry won\'t sit idly by, however, and these reforms are
much more likely to succeed if they are wrapped into a comprehensive
bill \-- with more vocal support from the leadership.

Congress also needs to take a close look at the school-themed credit
cards that are often offered by privately run college alumni
associations. The associations earn royalties and sometimes share a
portion of the money with the colleges, which are then required to
promote the cards on campus. These deals resemble the unsavory
arrangements under which student loan companies paid kickbacks to
colleges in exchange for being placed on so-called \'\'preferred
lender\'\' lists. The most prudent approach for colleges and alumni
groups would be to promote these cards only to graduates who have jobs
and bank accounts. If the colleges persist on marketing to students,
Congress should bar the practice.

**The New York Times**

**\
August 27, 2007 Monday\
Late Edition - Final**

**SECTION:** Section A; Column 0; Editorial Desk; EDITORIAL; Pg. 16\
\
**LENGTH:** 311 words\
\
**HEADLINE:** The College Credit Scam\
\
**BODY:**\
\
\
The credit card industry has made a profitable art of corralling
consumers into ruinous interest rates and hidden penalties that keep
even people who pay their bills permanently mired in debt. The companies
are especially eager to target freshly minted college students, who are
naive in money matters and especially vulnerable to credit card offers
that are too good to be true.\
\
Colleges, which often allow solicitation on campus, need to do more to
protect their students from taking on credit card debt that can severely
damage their economic prospects once they graduate from school and join
the world of work.\
\
College students need to be told right off the bat about the dangers
associated with the cards that the companies are going to throw at them
once school starts. The students need to know, for example, that the
penalties associated with delinquent debts will accrue to them \-- and
not to their parents, as many students seem to think. They should also
be told that delinquent debts can cause their interest rates to soar not
just on their credit cards, but on car loans and mortgages as well.\
\
Late payments on such loans and mortgages, even on electric bills, can
in turn cause their credit card interest rates to climb even higher.
More pointedly, students should know that employers can legally consider
the credit histories of people who apply for jobs.\
\
Colleges that allow credit card companies to solicit on campus should
scrutinize the offers carefully, to make sure that vulnerable and often
impoverished students are not trapped in deceptive deals that cast
shadows over their lives once they leave school.\
\
Beyond that, Congress, when it convenes next week, should move forward
with planned legislation that would tighten federal supervision over the
credit card industry while improving disclosure laws and outlawing
deceptive practices.

**The State Journal-Register (Springfield, IL)**

**\
August 20, 2007 Monday**

Future loan crisis avoidable\
\
**SECTION:** **EDITORIAL**; Pg. 4\
\
**LENGTH:** 608 words

WHEN THE CREDIT CARD INDUSTRY thought too many of its non-paying
cardholders were shirking their debts through bankruptcy protection, it
asked the government for help.

After years of freely dispensing cards to people with little or no
credit history, the credit card issuers were outraged that so many of
these credit-illiterate customers used their cards like
credit-illiterate customers. So in 2005, Congress acquiesced, changing
bankruptcy laws to make obtaining protection from creditors in federal
bankruptcy courts more difficult.

We said at the time that it was not bankruptcy law that needed to be
changed. What needed changing was the credit card industry\'s practice
of liberally issuing cards without properly determining a customer\'s
ability to handle credit.

Now the collapse of the subprime mortgage industry - which caters to the
highest-risk borrowers for home loans - ensures that we will have this
debate again, though this time the stakes are much higher. As the
troubles of the high-risk lenders unfolded last week, many feared a
spillover that would make banks reluctant to grant loans even to
borrowers with good credit. That would be detrimental to the overall
U.S. economy.

On Friday, the Federal Reserve recognized that potential. It lowered its
discount rate - the interest rate it charges banks to borrow money - to
encourage banks to continue their standard lending practices.

SOME BELIEVE that was a mistake; that it essentially enables more of the
same bad judgment that led to this problem in the first place.

Conservative columnist George Will is in that camp.

\"Moral hazard exists when a policy produces incentives for perverse
behavior,\" Will wrote in a column that appeared in Thursday\'s State
Journal-Register. \"And this would be such a policy: the Federal Reserve
lowering the cost of money whenever risky lending to a sector of the
economy (e.g., housing) makes that sector desperate for lower interest
rates. Many banks, hedge funds and other institutions have pocketed
profits from their dealings in the subprime market. The losses are
theirs, too.\"

The same logic should have been applied to the consumer credit industry
when it sought bankruptcy reforms in 2005. The difference in the current
situation is that - as Will does not recognize - the \"perverse
behavior\" of the subprime lenders, borrowers and investors stands to
imperil the entire U.S. economy, not just one sector.

AS COMPLEX as all this may seem, it all comes down to something very
simple: For years, many lenders offered money to borrowers who carried a
very high risk of defaulting on their loans. And for years, borrowers
eagerly grabbed loans for houses that they should have known were far
beyond their means. Often these loans were set up so that a rise in
interest would be disastrous to the borrower. Sometimes borrowers paid
only interest - gaining no equity in the home - for the first several
years of the loan.

Both lenders and borrowers counted on housing prices to continue to rise
like hot air balloons, as they had done for all of this decade until
last year, and interest rates to be steady. Neither happened.

In the months to come, especially as we near the 2008 presidential
election, we will hear many complicated theories on how this situation
should be addressed and who is at fault.

We believe there are two culprits: America\'s love of easy credit and
the bad habits that come with a culture built on consumerism.
Realistically addressing both - through tighter oversight of those who
make high-risk loans and better education of borrowers - is the only
effective protection against a repeat of the current crisis.

**Knoxville News-Sentinel (Tennessee)**

**\
August 15, 2007 Wednesday**

Duncan bill on credit-card debt merits discussion\
\
**SECTION:** COMMENT; **EDITORIAL**; Pg. 14\
\
**LENGTH:** 496 words

Credit cards and college students pose a lethal combination for
accumulating debt and, coupled with the wide availability of student
loans, graduates could be making payments well into middle age.

Fortunately, there is a proposal in Congress to provide some control
over college students acquiring hefty creditcard debt when they leave
campus for the workaday world.

U.S. Reps. John J. Duncan Jr., a Knoxville Republican, and Louise
Slaughter, D-N.Y., have filed the Student Credit Card Protection Act,
which calls for limits on creditors who are all too willing to extend
credit to students with little or no disposable income. Rep. Zach Wamp,
a Chattanooga Republican, is a co-sponsor.

The bill proposes that credit lines be limited to 20 percent of a
student\'s annual income or to a \$500 ceiling for students who have no
co-signer.

Duncan said the bill is designed to prevent credit-card debt from
soaring out of control. Amy Westmoreland, a spokeswoman for Duncan,
said, \"To have college students and college graduates start off on the
right foot and not have to worry about credit-card debt is something
that he thinks is a good thing to do.\"

Indeed it is. A number of state legislatures have wrestled with the
issue, with some aiming to prohibit credit-card companies from showing
up on campus altogether.

Locally, the University of Tennessee and Pellissippi State Technical
Community College have established policies against solicitation on
campus. UT spokeswoman Karen Collins explained that, in UT\'s case, the
protective measure came from the Student Government Association.

On the other hand, fliers with creditcard offers come to students in
regular mail, e-mail and through purchases on and off the campus.
Controlling does not mean prevention.

And, as some have noted, more than half of today\'s entering freshmen
already have at least one credit card, and many more obtain one by the
end of their freshman year.

One consumer group estimated that the average college student carries
more than \$2,000 in credit-card debt. By some standards, that is not
overwhelming, but making only the minimum payments can drag out the debt
for several years, while paying much more in interest that the goods
probably were worth. The standard warning is this: Imagine at age 30
finally paying off that pizza you bought for your friends your junior
year.

To avoid credit-card debt, it would be best not to bond with plastic at
all. However, for too many, that is not realistic. Parents should have
serious talks with students about financial responsibility and financial
accountability. At some point, all creditcard debt has to be paid.

In that light, the bill by Duncan and Slaughter limiting the
availability of credit to \$500 appears reasonable. The bill deserves a
better fate than it has experienced since first introduced in 1999, at
least generating discussion from those who can make a difference in
whether students graduate from college with a fighting chance to pay off
their bills.

**Copley News Service**

**SAN DIEGO UNION TRIBUNE**

**\
June 18, 2007 Monday 11:49 AM EST**

Credit card fees\
\
**BYLINE:** The San Diego Union-Tribune\
\
**SECTION:** DAILY EDITORIALS\
\
**LENGTH:** 332 words

Americans use credit cards to pay for just about everything from
toothpaste to property taxes. The average family had five credit cards
in 2005, according to a Government Accountability Office study. And as a
nation, we ran up \$1.8 trillion in charges.

Credit card usage has increased - thanks in great part to heavy
promotion by the banking industry. But because there was less and less
room for growth in the number of cards issued, the industry had to come
up with other ways to increase profitability. It came up with penalty
fees. We can pay an extra \$35 when we\'re late making payments or go
over our limits. Our interest rates can double if we are late paying
another bill. Sometimes we have to pay fees just to pay our bills.

Over the years, these practices have irritated consumers. The credit
card industry responds by promising disclosure, usually in the form of
multi-page, tiny-type \"change in terms\" mailings that the average
consumer has to spend the evening trying to comprehend.

Now Sen. Carl Levin, D-Mich., has introduced the Stop Unfair Practices
in Credit Cards Act, which would rein in some of the credit card
industry\'s most egregious practices. Among other things, the
legislation would:

\- Limit interest rate increases to no more than 7 percent for late
payments;

\- Prohibit fees charged just to pay bills;

\- Prohibit interest on debts paid on time;

\- Allow interest rate increases only on future debt;

\- Require currency exchange fees to reasonably reflect the credit card
issuer\'s actual costs.

Most consumer groups support these changes. The credit card industry
does not, saying these proposals eventually would limit consumer choice.
But excessive fees also limit consumers\' choices, because they have
less money to spend on other items.

It is time to end some of these burdensome practices. Consumers
shouldn\'t need lawyers to understand the terms of their credit card
usage or to be placed in a no-win situation with extra fees.

Reprinted from The San Diego Union-Tribune.

**The San Diego Union-Tribune**

**\
June 18, 2007 Monday**

Credit card fees;\
Some charges should be restricted\
\
**SECTION:** OPINION; Pg. B-6\
\
**LENGTH:** 325 words

Americans use credit cards to pay for just about everything from
toothpaste to property taxes. The average family had five credit cards
in 2005, according to a Government Accountability Office study. And as a
nation, we ran up \$1.8 trillion in charges.

Credit card usage has increased \-- thanks in great part to heavy
promotion by the banking industry. But because there was less and less
room for growth in the number of cards issued, the industry had to come
up with other ways to increase profitability. It came up with penalty
fees. We can pay an extra \$35 when we\'re late making payments or go
over our limits. Our interest rates can double if we are late paying
another bill. Sometimes we have to pay fees just to pay our bills.

Over the years, these practices have irritated consumers. The credit
card industry responds by promising disclosure, usually in the form of
multi-page, tiny-type \"change in terms\" mailings that the average
consumer has to spend the evening trying to comprehend.

Now Sen. Carl Levin, D-Mich., has introduced the Stop Unfair Practices
in Credit Cards Act, which would rein in some of the credit card
industry\'s most egregious practices. Among other things, the
legislation would:

\* Limit interest rate increases to no more than 7 percent for late
payments;

\* Prohibit fees charged just to pay bills;

\* Prohibit interest on debts paid on time;

\* Allow interest rate increases only on future debt;

\* Require currency exchange fees to reasonably reflect the credit card
issuer\'s actual costs.

Most consumer groups support these changes. The credit card industry
does not, saying these proposals eventually would limit consumer choice.
But excessive fees also limit consumers\' choices, because they have
less money to spend on other items.

It is time to end some of these burdensome practices. Consumers
shouldn\'t need lawyers to understand the terms of their credit card
usage or to be placed in a no-win situation with extra fees.

**BestWire**

**June 8, 2007**

**HEADLINE:** HOUSE MEMBERS SAY TOUGHER RULES NEEDED FOR CREDIT CARD
ISSUERS\
\
**BODY:**\
WASHINGTON (BestWire) - Lawmakers had harsh words for federal banking
regulators this week, saying that better disclosures are not enough to
curb abuses in the credit card industry, and that regulators need to
take action.\
\
Several members of the House Financial Services Committee were critical
of the Federal Reserve Board at a June 7 hearing, saying the U.S.
central bank has not done enough to rein in deceptive credit-card
practices, and that regulations or even legislation over and above what
the Fed is proposing may be in order.\
\
\"What I keep hearing you saying is the Fed hasn\'t done squat, and they
continue to do squat,\" Rep.\
\
Melvin Watt, D-N.C., said to representatives of the federal banking
regulators.\
\
The Federal Reserve Board, which is charged with reining in abusive
lending practices under the so-called Regulation Z, was singled out for
criticism. Rep. Carolyn Maloney, D-N.Y., chairwoman of the committee\'s
financial institutions subcommittee, pointed out that the Fed, alone
among the federal government\'s five banking regulators, has authority
to ban deceptive practices under the Truth In Lending Act, or TILA.\
\
Maloney asked the other federal banking regulators whether they, too,
should be granted similar rulemaking authority. Three of them \-- the
Office of the Comptroller of the Currency, the Federal Deposit Insurance
Corp., and the Office of Thrift Supervision \-- indicated they would
welcome the additional authority, but only FDIC Chairwoman Sheila Bair
said that her agency would use it.\
\
\"We do think we should have rulemaking authority,\" Bair said. \"As a
practical matter \... it should be done on interagency basis, but having
that authority would allow us to initiate a rulemaking and have a seat
at the table.\"\
\
Some House members are considering legislation to ban fees for paying
bills online or for paying during the account\'s grace period,
retroactive interest rate hikes, and banning the practice known as
\"universal default,\" in which card issuers raise rates when customers
on late on payments to other, unrelated creditors. At the hearing,
Maloney said she would host a meeting of regulators and credit-card
issuers to draft an enforceable standard for credit-card practices.\
\
The banking regulators, however, were less than clear about whether they
supported additional regulatory or legislative action to curb certain
credit-card practices. Frederic Mishkin, board member of the Fed, said
his agency \"will consider if other steps need to be taken,\" while U.S.
Comptroller John Dugan said better disclosures may solve any problems.\
\
\"Can improved disclosure be sufficient to address the fundamental
issues raised by current credit-card practices? We certainly hope so,\"
Dugan said. Mishkin said he expected that a proposed update of
Regulation Z would help.\
\
Maloney did not agree, and later suggested the Fed was dragging its
feet. \"Why are you not moving forward with guidance on **credit
cards?\" Maloney** asked Mishkin. \"You have the authority to do it.
From your testimony, it sounds like you have no intention of coming
forward with guidance or a regulation.\"

**Chicago Tribune (Illinois)**

**\
Distributed by McClatchy-Tribune News Service**

**\
May 31, 2007 Thursday**

No more surprises\
\
**BYLINE:** McClatchy-Tribune News Service\
\
**SECTION:** COMMENTARY\
\
**LENGTH:** 528 words

The following editorial appeared in the Chicago Tribune on Thursday, May
31:

X X X

Ever try to read all the rules governing your credit card?

Even savvy consumers have little idea what the rules are, because credit
card issuers seem to compete with each other to see who can write the
most indecipherable gibberish in the smallest type. The frequent result:
Consumers are surprised by fees and penalties that show up on their
monthly statements. Card issuers insist it was all right there in the
fine print.

The Federal Reserve Board wants to change that. It has just unveiled the
most far-reaching changes to Regulation Z, known as the truth-in-lending
laws, in 26 years. The proposed rules will give consumers \"key
information about credit card terms in a clear and conspicuous format
and at a time when it would be most useful to them,\" said Fed Chairman
Ben Bernanke. (The public can comment on these changes for the next four
months. The Fed then may make changes before issuing final rules.)

Card issuers would have to give consumers 45 days of notice if they plan
to raise the interest rates charged. (That would give customers time to
shop around for a better rate.) Issuers would have to prominently
display on monthly statements how much customers have paid in fees and
penalties so far that year. Issuers would also have to display certain
terms and conditions in larger type.

These are sound changes. Giving consumers clear information in a form
they can actually make out will help them make better decisions about
credit.

Congress is looking at some other questionable practices by the people
who give you credit cards. One is \"universal default,\" raising a
customer\'s credit card interest rate when that customer has begun to
pay other bills \_ another credit card, mortgage or utility bills \_
late. Another is \"double-cycle\" billing, which allows issuers to
charge interest on debt that has already been paid. For example, a
customer charges \$5,000, pays off \$4,000 on time, but is charged
interest on the whole debt. Card issuers have also come under fire for
charging customers who have exceeded their credit limit penalties month
after month or charging interest on such penalties.

The Fed\'s proposed changes to Reg Z would not outlaw those practices.
But the Fed changes would make sure consumers go into these agreements
with eyes wide open \_ and that they receive ample notice of any
changes.

Credit can be a helpful tool and the bargain ought to be a simple one:
Card issuers offer access to credit. Consumers make use of that credit
in responsible ways. The rules are spelled out clearly. Consumers pay
their bills on time. When they don\'t, they are penalized. There should
be no surprises.

\_\_\_

**THE SEATTLE POST-INTELLIGENCER**

**\
May 24, 2007 Thursday**

**\
**CONSUMERS: SMARTER PLASTIC\
\
**SECTION:** **EDITORIAL**; Pg. B6\
\
**LENGTH:** 179 words

The workings of the Federal Reserve are usually the focus of Wall
Street, economists and general policy wonks. Sure, most of us benefit
from lower interest rates when we buy a house or a car, but we don\'t
need to think much about the details.

That\'s why it\'s worth noting when consumers win one. The Fed is
proposing that credit-card companies notify consumers 45 days in advance
before changing the rules of a credit card or boosting the interest rate
and other fees.

It\'s about time. Household debt is at record levels - roughly \$2.4
trillion. The more clarity and consumer education, the better.

It\'s worth mentioning how the Fed went about this process: It used
consumer testing. \"Not only did we ask consumers,\" Fed Governor
Randall Krozner said, \"we listened.\"

The Fed\'s proposal would simplify how fees and the annual percentage
rate are calculated. This is essential because consumers need to know
exactly how much they\'re being charged to rent money.

Americans do love their credit cards - an awfully good reason to include
consumer protection as part of the plastic package.