Tierney lashes out at credit card companies

PEABODY-U.S. Rep. John F. Tierney lashed out Tuesday at credit card companies that are exorbitantly increasing their borrowing rates before new banking regulations go into effect.”The time to cap credit card interest rates is now,” said Tierney, who announced plans to file legislation aimed at reining in rates and closing fee loopholes.Joined by congressional colleagues U.S. Rep. Louise Slaughter of NewYork and Michael Capuano of Massachusetts, Tierney said he will introduce the Renewing America’s Commitment to Consumers Act, a bill to cap credit card interest rates at 16 percent and prevent the kind of dramatic rate hikes consumers n even those with strong credit histories and who have paid their balances on time ? have been experiencing.Earlier this year, Tierney attempted to add an interest cap to pending credit card reform legislation but was unable to get that provision inserted.At the time, he warned companies would seek to make up revenue losses from reforms in that legislation by raising rates, and that seems now to be exactly the course companies are taking, said Tierney spokeswoman Catherine Ribeiro, noting that this recent effort is a free-standing bill that seeks to close loopholes being exploited by the credit card companies at consumers’ expense.”For years, but particularly during these challenging economic times, Americans of all ages n from college students to senior citizens n have been forced to take on credit card debt to pay their bills and make ends meet. What we recently have seen in response is that the credit card industry has seized this opportunity to unfairly and arbitrarily raise interest rates across more customer accounts than ever before. This legislation would end such exploitive practices and protect consumers,” Tierney said.The congressman noted that laws limiting this kind of usurious behavior have been in place since the Babylonian Empire and were present in the United States on the state level until 1978 when a Supreme Court ruling effectively eliminated states’ usury laws. That decision called on Congress to act and address the issue with new legislation, but Congress has not acted to do so and rates have continued to climb unchecked, he said.In addition to capping credit card interest rates at 16 percent the Restoring America’s Commitment to Consumers Act would also limit exorbitant and unnecessary fees such as membership fees or annual fees, and would cap any contingency fees (such as fees for late payments) at $15 per fee. It would ensure strong protections by making clear the bill’s provisions would not supersede any state law with a lower usury cap.