Rep. Schauer Co-Sponsors Bill to Freeze Unfair Credit Card Rate Hikes, Protect Consumers

Congressman joins colleagues in urging bailed out Wall Street firms to stop taking advantage of responsible customers

WASHINGTON, Oct 30 - Today Congressman Mark Schauer (D-MI) co-sponsored the Credit Card Rate Freeze Act, legislation that would immediately freeze interest rates on consumer credit card accounts ahead of federal credit card reform legislation slated to go into effect early next year.

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Earlier this week, Schauer joined 45 of his House colleagues in sending a letter to the CEOs of Bank of America and Citigroup, which together have received $45 billion in federal bailout funds, urging them to reconsider their decision to charge new credit card fees on customers in good standing.

“Rather than helping small business owners obtain credit to create Michigan jobs and stabilize our economy, these credit card companies are taking advantage of responsible consumers who helped finance their bailouts,” said Schauer. “This is why I voted against the Wall Street bailout in the first place, and why I’m committed to holding these companies accountable and protecting consumers.”

Congressman Schauer was a co-sponsor of the Credit Card Accountability Responsibility and Disclosure Act of 2009, which aims to curb unfair and deceptive credit card lending practices and was signed into law earlier this year. It is slated to go into effect in February of 2010.

The Credit CARD Act requires 45 day notification of interest rate increases and lengthens from 14 days to 21 days the amount of time before the due date that a statement must be delivered. The bill Rep. Schauer co-sponsored today would force companies to immediately freeze rates on existing balances until the remaining provisions in the Credit CARD Act go into effect.

A constituent from Battle Creek wrote in this week to explain that his credit card interest rate from Citibank was going up from 6.99% to 29.99% on all charges, past and present. He said, “This will possibly cause me to declare bankruptcy. [My wife] and I are unemployed and she is now going through Chemotherapy. I have been with Citibank for over ten years and have never once been late or over drafted. No one can pay off a balance at 29.99%.”

Source: Congressman Mark Schauer