Released: December 02, 2007

Shining a light on credit card fees

Source: Carrie Johnson, Washington Post (Free Registration)

Senior Democrats on Capitol Hill want to ban excessive credit card fees. Bank regulators are on the verge of forcing companies to give more notice before raising interest rates. And New York’s attorney general, whose investigations transformed the student loan industry, now has his eye on conflicts of interest in the credit card sector.

After years of complaints about abusive practices that trap borrowers in an endless debt cycle, federal and state officials are shining light on the most controversial practices and preparing changes that would make card companies’ policies more consumer-friendly.

The fight between consumer advocates and the banks that issue credit cards has been simmering for decades. But a rise in cardholder complaints and the ascension of Democrats in the House and Senate is pushing companies to engage in preemptive damage control and is setting the stage for what could be the most significant changes to the industry in more than two decades.

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