The first big surprise of Rep. Carolyn Maloney's hearing on her proposed credit cardholders' bill of rights was who wasn't speaking. A few minutes before the hearing began Thursday, her spokeswoman explained that the consumers the congresswoman had invited to testify were no longer being asked to do so, out of concern that credit card providers couldn't respond to the consumers' tales of woe unless waivers had been signed. It wasn't clear why the waivers weren't immediately handed out and signed. (Maloney later released a statement expressing her disappointment and commitment to having the "regular people" testify at a future date.)
Maloney's bill of rights would mandate 45 days' notice of any interest rate increases and prohibit card companies from raising rates because of behavior related to other accounts. It is one of a handful of credit card reform proposals being debated in Congress. Sens. Ron Wyden and Barack Obama have also proposed a five-star rating system to help consumers easily evaluate cards' policies.
Industry groups, including the American Bankers Association, vigorously oppose such changes. "The Maloney bill could lead to a lot of negative consequences," says Ken Clayton, managing director and general counsel at ABA. He says controls that limit credit providers' ability to price credit according to risk—that is, charge higher rates to consumers who are more likely to default—will increase prices and limit credit access for all consumers.
Expect more on this hot topic in the coming weeks.
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