Rep. Abercrombie Appeal to Credit Card Companies Pays Off for Consumers

October 13, 2009 -- Washington, D.C. -- Discover Financial Services CEO David Nelms has assured U.S. Representatives Neil Abercrombie (HI), Betsy Markey (CO) and a group of House Members that Discover “will not initiate any change in terms” on credit card accounts to beat a new federal credit card reform law into effect.

Markey, Abercrombie and sixteen other representatives wrote the Chief Executive Officers of JP Morgan Chase & Co., Bank of America, Discover Financial Services, American Express, Capital One Financial Corp. and Citigroup asking them not to change the terms on credit card accounts ahead of federal reform legislation. Discover joins Bank of America in announcing that no change in consumer credit card accounts will be made.

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“We gave credit card companies until February 2010 in the legislation so they could implement the new regulations, not so they could start hiking interest rates on people who are already struggling financially,” said Abercrombie, who cosponsored the Credit CARD Act, passed by Congress and signed into law by President Obama in May.

A report by the non-partisan Pew Charitable Trust indicates that credit card interest rates have increased an average of 20% this year. Issuers are changing account agreements, revoking promotional rates and imposing interest rate increases on existing balances, including those less than 30 days past due.

Abercrombie has also introduced the Small Business Credit Card Act, bipartisan legislation to protect small businesses with 50 or fewer employees from abusive practices, such as double-cycle billing, unannounced changes in payment due dates or interest rates hikes on existing balances. The Credit CARD Act will protect consumers from these practices.

Source: Representative Neil Abercrombie