The chairman of the House Financial Services is calling for the earlier implementation of the CARD Act of 2009 and the tougher regulations that come with it. Rep. Barney Frank (D) of Massachusetts says that the federal government should hasten the implementation of new rules designed to curb the unfair practices of the credit industry.
Frank is expected to introduce a new bill that would set the implementation of the milestone legislation earlier than previous plans. Experts say that the Democrat lawmaker is eyeing January 1 of next year instead of February. The congressional representative said that the need for earlier implementation came about after months of continuous complaints from constituents. He added that American cardholders have raised complaints regarding abusive rates and unfair changes to card terms in recent months.
Anticipating the tougher regulations, card companies have resorted to higher fees, penalties, and charges to make up for expected losses. Card issuers have also been raising interest rates to get as much revenues as possible from cardholders before the new rules make it virtually impossible for them to revert to traditional industry practices.
Analysts say that card firms have even went so far as to close down card accounts they deem risky, slashed credit limits on millions of cards, and raised monthly minimum payments. The combination of sudden changes in card terms has made it almost impossible for millions of cardholders to cope with. In fact, experts and financial research firms say that defaults and charge-offs have increased significantly after card companies introduced new changes.
Aides of Rep. Frank say that House Financial Services Chairman is close to filing a bill that would hasten the implementation of the new rules. Steven Adamske, Rep. Frank's senior aide, revealed that a bill could be filed as early as Dec. 1 of this year. Even the major sponsor of the original bill, Rep. Carolyn Maloney (D) of New York, expressed support for an earlier implementation of the tougher regulations. Rep. Maloney also spoke with Frank earlier this week to discuss plans for an earlier implementation.
Representatives of various business organizations weighed in on the proposed plan, saying that rushing the new rules can result in more problems for cardholders and small businesses. Experts say that the announcement of earlier implementation can force card companies to speed up their already abusive practices. Analysts fear that card issuers may resort to denying credit cards to more Americans, who rely on them for their daily expenses.