ABA says card industry responding to criticism
Speaking before a U.S. House panel on April 26, 2007, the head of the American Bankers Associations said that the credit card industry is responding to criticism from the government and disgruntled consumers. The industry has come under fire from both groups, who are seeking new standards for issuers they say bury borrowers in debt.
ABA head Edward Yingling reported to the House Financial Services Committee that the ABA's Card Policy Council, whose members include the major credit card issuers, is meeting weekly in an effort to create fresh industry disclosure standards.
These new standards would help consumers understand and avoid expensive credit card penalty fees, Yingling explained.
He added that the credit card industry is reacting to recent congressional criticism that many cardholders end up stuck in debt due to unfair fees and interest rates.
Yingling noted that the industry is aware that it is in no one's interest to have policies that alienate some customers or drive consumers into financial hardship from which they cannot break free.
Meanwhile, the Federal Reserve is undertaking revisions for regulations governing credit cards disclosure statements.
Separately, Yingling said that delinquency rates for credit card payments have remained steady in spite of fears that could increase amid U.S. consumer defaults on sub-prime mortgages. In theory, credit card delinquencies should rise ahead of mortgage defaults, since the ABA says that consumers usually opt to be late on unsecured loans prior to an auto or home loan.
To comment on this story, write Editors@CreditCards.com.
More credit card news.
- Fed: Balances on cards rose $1.2 billion in July – Credit card balances rose at a 1.5 percent annualized rate in July, the Federal Reserve said, reversing a decline the previous month ...
- Main lesson after Equifax breach: Protect yourself – September 2018 marks the first anniversary of Equifax's massive breach, which prompted calls for tougher security. Continuing hacks, however, prove that breaches won't cease. ...
- Surprising credit card travel exclusions – Your credit card's travel insurance may not cover injuries sustained while taking part in a protest or riot, driving under the influence, skydiving, or due to a pre-existing medical condition ...