Austan Goolsbee, an economist and White House credit card expert, answered consumer questions about the new credit card reform law during a live town hall webcast on CreditCards.com.
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How do you complain about a credit card issuer that violates the new Credit CARD Act? How can the law stop new credit card fees and practices that are emerging?
Consumers put their questions about the new credit card law to a top White House credit card expert Monday during a live video town hall webcast from www.creditcards.com/askthewhitehouse.
|Watch a replay of the White House online town hall on credit card reform, which featured economic adviser Austan Goolsbee and White House online programs director Jesse Lee. The event was hosted by CreditCards.com.|
The nearly 30-minute event was held on the day the bulk of sweeping consumer protections in credit card reform law took effect. “It’s a pretty big day,” Austan Goolsbee, a member of the White House Council of Economic Advisers, said during the chat. More than 450 questions were submitted by participants both before and during the event.
The new law, signed by President Obama in May 2009, is being phased in over a yearlong period. The majority of provisions start today, when credit card companies can no longer increase interest rates “at any time, for any reason” on existing card balances. Among other things, the law also restricts marketing and issuing credit cards to people under 21 and protects interest rates during the first year on new credit card accounts. The law also includes requirements that credit card companies disclose important details of account terms in “plain English” terms and allow cardholders to opt out of significant changes and close their accounts.
‘Land of the sneaky’
“When we’re operating in the land of sneaky, a lot of bad things can happen because people just don’t understand it,” Goolsbee said during the town hall.
“What we’re trying to do here is change the most abusive credit card practices … change the balance of power. If you have a credit card, the balance of power is like this now,” he said holding his arms above his head with one much higher than the other.Goolsbee answered consumer questions about the law as they streamed in live from CreditCards.com and through Twitter. Questions were also submitted in advance through the website, Twitter and Facebook.
The first question came from Jessica Whiat, who asked how the new rules would be enforced. Goolsbee referred cardholders who have problems with companies that don’t follow the new rules to go to the website HelpWithMyBank.gov, which is run by the Office of the Comptroller of the Currency (OCC). Currently, depending on how a bank is chartered, consumers must file complaints with one of six different regulators.
“The bank regulators of the bank that issues the credit card are the ones charged with enforcement. That is why the administration has pushed for a single consumer financial protection agency to make it easier,” Goolsbee said. He referred to a proposal to create an independent consumer watchdog agency that would oversee existing and emerging financial products such as credit cards, mortgages and car loans. Part of the massive Wall Street reform package, the plan was passed in the U.S. House in December 2009, but has stalled in the U.S. Senate. Opponents want to make the financial protection agency a part of an existing regulator, such as the U.S. Treasury, but supporters argue the agency needs to be an independent authority.
Obama: ‘Holding credit card companies accountable’
In a statement released a few hours before the town hall, President Obama said the law is an important step for American families: “For too long, credit card companies have had free rein to employ deceptive, unfair tactics that hit responsible consumers with unreasonable costs. But today, we are shifting the balance of power back to the consumer and we are holding the credit card companies accountable.”
U.S. Rep. Carolyn Maloney joined several other members of Congress in New York City in welcoming the arrival of the new credit card law protections.
“This is a great day for anyone with a credit card in their wallet,” Maloney said in a statement. “Most of the Credit CARD Act kicks in today — halting many of the worst abuses by the credit card industry. No longer will card companies be able to increase interest rates on existing balances, and that alone is a huge victory that will save Americans billions each year.”
See related: Credit card reform and you