The Office of the Comptroller of the Currency (OCC), a governmental regulatory organization feeling the pressure with the White House proposing replacing many of their duties with a new consumer-oriented regulatory body, has sent out a warning to the CEOs of all national banks. The Credit CARD Act of 2009 requires credit card issuers who raise a customer’s interest rate to abide by a number of regulations.
These regulations, such as the requirement to reassess the rates for anyone whose rate increased since January 1, 2009 and for the bank to provide a specific reason for any rate increase, don’t take effect until August 10, 2010. The OCC’s warning is designed to remind credit card issuers that although the rules don’t change until a year from now, they will be in effect for any customer who has been effected since January 1, 2009 — before the Act became a law. The banks will need to maintain these records so they will be available when the regulators come calling next year.
Read the OCC’s letter to CEOs of national banks.
Unfortunately, I am unaware whether my credit cards have increased their interest rates. It has been a long time since I’ve used a credit card to pay for something I could not pay back by the date the credit card payment was due. But I consider myself lucky and thankful to be in that position.
Has your interest rate increased this year?
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{ 8 comments… read them below or add one }
This is good. Hopefully it will prevent banks from doing a bunch of last minute screwy rate increases before the new regulations go into effect.
They have already done it. I have three credit cards with two different banks and I have received a notice for each that rates will be going up. Two of those I received a notice in the last two months.
Just one of the benefits of paying off our credit cards in full each month! We are not at the mercy of these unstable corporations!
I consider myself lucky and fortunate to be in a position were I am not subjected to outrageous credit card interest rates as well and this latest news makes me appreciate the hard work and sacrifice I put in to get here!
I wasnt’ affected by the increases because the cards had a $0 balance, but I have received notices from 2 of my 8 cards increasing my rate.
I think the scarier part is that he gov’t is going to review business decisions of public corporations
Yup. Chase, Citibank, and Discover have all done this to me. In fact, Chase has done it twice to the same account, once three and a half years ago, and again last June.
All I have to say is I look forward to disconnecting from their services in a few more months and just use my American Express. I may pay for the use of their convenience, but at least this is negotiated upfront and well known.
Same here. Rates on pretty much all of them have gone up. In addition, they have gone up way higher than I have EVER had even starting off. I think it is ridiculous and hopefully this will help undo these insane APR increases. Only time will tell though….
Yes. Chase (United Mileage Plus card) upped my already high rates from 14.99% to 18.99%. When I called to inquire about it, their response was only “because of the new legislation they are increasing member’s rates.” I wasn’t late or too close to the limit or anything like that…. So I told them I couldnt pay it and they set me up a payment plan with 6%….. They are ridiculous, not basing it on member’s payment histories, just their bottom line. Those increases might push already fragile people over. I took the payment plan with 6% interest and immediately cut up my card.
Kamantha,
I can confirm your “might push already fragile people over”. Recent rate jackings by card issuers, though a practice long in play, has accelerated in the past 6 months. I can attribute more than 50% of the consultations I have done this year to banks increasing interest rates on consumers who were close to the edge, and the increased minimum pushed them over the edge.
Perhaps the banks line of reasoning is to “get some, while the gettin’s good”, but I see this backfiring in the same way the bankruptcy law changes from 2005 backfired.