Credit Card Debt Problems - Finally! New Laws For Lenders! By Trace Morgan

Since 2007, legislators in Congress have attempted to pass strong credit card laws regulating interest rate changes and other aspects of consumer credit.   Repeatedly, the efforts have been blocked by the powerful bank lobby.  These banks are one of the leading contributors to campaign chests and their lobbyists have a heavy influence (and easy access) on members of the House and Senate.

The Federal Reserve Board passed "rules" for credit card lenders in December 2008 - but left a huge window of time before implementation.   The result was quickly apparent as predatory lenders immediately began raising interest rates, lowering credit limits, and raising fees in order to better position their business before the June 2010 deadline.

As lenders looked for loopholes in the new rules, the general public outcry became louder and bankruptcies caused by heavy credit card debt have soared. 

Congress recognized the time was right for further legislation and has now passed the strongest laws on credit card lending institutions that have ever existed.  These laws will have a dampening effect on the credit industry as a whole and spokesmen for the large lending institutions have campaigned rigorously to prevent passing of the new legislation.  For the first time in many years, those lobbyists failed to bury the new legislation.

The new laws are a major consumer protection act that will protect credit card users from arbitrary raising of interest rates, over the limit fees, and other predatory practices that have become business as usual in recent years.  Opponents of the bill argue the new laws would harm "good" credit card holders and cause their fees to increase.  That same argument worked in previous years to prevent regulatory oversight.

With the massive number of people who are struggling to pay inflated credit interest rates and fees in this economy, the argument fell on deaf ears.   The only concession was delaying implementation of the new laws until February 2010.  While this is an improvement over the July 2010 deadline of the Federal Reserve rules,that does leave a ten month window where credit companies can operate as usual.   It's likely credit card lender activities will be fast and furious as lenders attempt to raise rates and position accounts to allow them maximum profit.

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