Being held up at gunpoint is a minor problem for most Americans compared to having money stolen from them by credit-card companies. Now, as the economy worsens, regulators are finally bestirring themselves to prevent some of the theft.
The Washington Post reports: “The Federal Reserve and two other banking regulators are set to unveil today one of the most aggressive efforts in decades to crack down on the credit card industry, prohibiting practices such as arbitrarily raising interest rates on outstanding balances.
“The proposed regulations, which could be finalized by year’s end, would label as ‘unfair or deceptive’ practices that consumers have long complained about. That includes charging interest on debt that has been repaid and assessing late fees when consumers are not given a reasonable amount of time to make a payment.”
More than a year after hearings on the industry’s “unfair or abusive” practices, Congress has done nothing about the loan-shark tactics of large banks that charge as much as 30 percent interest for late payments and cash advances.
After being burned by the sub-prime mortgage scandal, federal regulators are taking some action to head off massive credit-card defaults beyond their efforts to educate consumers on how issuers use fine print to steal from them.
Cross-posted from my blog.