Two Years After Passing the Credit CARD Act, Congress Steps Up Attacks on Consumer Cop Designed to Enforce It

Statement of Diane E. Brown, Executive Director

Arizona PIRG

“The Credit CARD Act of 2009 has eliminated numerous credit card tricks and traps without causing skyrocketing interest rates or any of the other horrible side-effects that the banks once warned would happen.  In spite of that success, the banks and their Congressional allies are now seeking to eliminate the Consumer Financial Protection Bureau (CFPB), the new consumer cop created to enforce the CARD Act and protect consumers from other tricks of the trade, like deceptive mortgage practices and unfair overdraft fees.

The Credit CARD Act bans the worst credit card practices, such as raising interest rates on existing balances when a consumer is as little as one day late, raising interest rates on consumers who had never been delinquent to the bank and tricking other consumers into paying late by making their bills due on a Sunday or a holiday.  And while the CARD Act is working today, the new CFPB will ensure that consumers stay ahead of the banks and their newest credit card tricks. 

On Friday the 13th of May, an unlucky day for consumers, the U.S. House Financial Services Committee sent three bills to the floor to gut the CFPB. The committee approved HR 1315 to give greater control over the CFPB to existing bank regulators, HR 1121 to eliminate its yet unnamed director and replace him or her with a weak 5-member commission, and HR 1667 to delay its start date from July 21, indefinitely, until it has a confirmed director.

Attacks on the CFPB may be good for Wall Street, but they are certainly bad for consumers. And they have proven to be even more senseless by the success of the CARD Act, which shows that consumer protection works when it is not diluted by the banks.”