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Boston, May 25 – Statement of MASSPIRG Legislative Director Deirdre Cummings on the now-two-year old Credit CARD Act signed on May 22, 2009 and efforts in Congress to weaken it and other consumer protections by delaying, defanging, and defunding the new Consumer Financial Protection Bureau (CFPB).
“The Credit CARD Act, passed in Congress in 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 about. In spite of that success, the banks and their Congressional allies are now seeking to eliminate the 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 banned the worst credit card practices, such as raising interest rates on existing balances when a consumer was as little as one day late, raising interest rates on consumers who’d 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, which is why the banks are trying to stop the CFPB before it starts on July 21.
“On Friday the 13th of May, an unlucky day for consumers, the House Financial Services Committee sent three bills to the floor to gut the CFPB like a fish. The committee approved HR 1315 (Duffy-WI), to give greater control over the CFPB to existing bank regulators, HR 1121 (Bachus-AL) to eliminate its yet unnamed director and replace him or her with a weak 5-member commission, and HR 1667 (Capito-WV), to delay its start date from July 21, indefinitely, until it has a confirmed director. In the Senate, 44 of 46 Republican Senators sent the president a letter threatening to block the confirmation of a director unless all of these changes, and others, including eliminating the bureau’s independent funding, were made. The good news is that the Credit CARD Act is supported by each of our 10 US Representatives and neither of our US Senators, Kerry or Brown, signed the senate letter to the president. However, this support is not enough to ensure a strong CFPB.
“These 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’s not diluted or defanged by the banks.”
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