“Unfair” credit card practices, such as sudden rate increases, will disappear sooner than the 18-month implementation period set by regulators, Senator Christopher Dodd predicted on Thursday. “These practices are wrong, and they're unfair,” said Dodd, the Connecticut Democrat who chairs the Senate Banking Committee. His comments were directed to a Congressional hearing. “Mark my words: in the coming months, they will end,” he said. Card issuers currently have until July 2010 to implement limits to sudden interest rate increases and curbs on confusing payment structures. The rules were adopted in December by the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration. The new rules prohibit raising the annual percentage rate on existing balances except under certain circumstances and give consumers 45 days notice before a rate increase and 21 days to pay. Dodd is among several lawmakers who have reintroduced legislation to curb abuses by card issuers amid criticism that regulators were too generous in setting their deadline. Democratic Senator Charles Schumer and Representative Carolyn Maloney, both from New York, are among lawmakers who want to reduce the implementation period to as little as three months. Dodd did not express a preference for a new implementation date and it was unclear if he was inclined to impose a date by legislation or hoped for voluntary action. Banks such as Citigroup Incorporated, Bank of America Corporation and JPMorgan Chase & Company have long opposed changes to their profitable credit card business. The new regulatory rules will also ban a practice known as universal default, in which card terms are changed based on how the holder performs on other bills, such as utility charges or gym memberships. Citi, Bank of America and JPMorgan are among the biggest issuers of cards carrying the Visa Incorporated, MasterCard Incorporated logos. American Express and Discover Financial Services offer their own products.
