The head of the American Bankers Association told lawmakers that the credit card industry is 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.
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