/PRNewswire / -- The credit card legislation passed yesterday by the United States Senate won't protect consumers against outrageous interest rates or other egregious practices and represents an astounding victory for the banking and credit card industry, a consumer advocate said today.
Harvey Rosenfield, head of the California-based Consumer Education Foundation, noted that under the Senate bill:
-- There is no cap on credit card interest rates. In recent months,
companies have raised interest rates for some consumers -- even those
with good credit -- to over 30%.
-- Companies can raise interest rates on future purchases at any time.
The bill only prevents companies from increasing interest rates on
previous purchases.
-- Credit card companies can unilaterally changes the terms of the credit
card contract.
-- Companies can still use fine print "arbitration" clauses to prevent
consumers from suing them in court.
"This is not 'reform,' it's a charade," said Rosenfield. "After what American consumers have gone through, they deserve real relief. After all, the banking industry would not exist today were it not for a trillion dollar taxpayer bailout that allows banks to borrow our money from the US Treasury at a fraction of a percentage point and then turn around and loan it to us at twenty to fifty times that rate."
"The credit card industry's attempt to portray this as a defeat is just posturing designed to protect its political allies in Washington. As usual, no one in that city seems to be looking out for the interests of the people of our country."
The Consumer Education Foundation is a non-profit, non-partisan organization. In March, it co-published a two hundred page report on the causes of the financial debacle: "Sold Out: How Wall Street and Washington Betrayed America." The report can be downloaded at WallStreetWatch.org.
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