New CRL credit card research identifies hidden and deceptive credit card issuer tricks and traps continue, even after the passage of the Credit CARD Act of 2009 and pending Federal reserve rules. The Dodging Reform report explains why American borrowers continue to experience arbitrary, unfair interest rate hikes and fees through examining issuer practices. These practices manipulate interest rates, pad miscellaneous fees, and include deceptive policies on penalty late payment fees. The federal legislation stopped some of the worst abuses in the industry, but a strong consumer-focused regulator like the CFPA would provide common-sense rules on credit cards and could respond to abuses as they surface.

Mandatory arbitration study. CRL's analysis shows consumers lack rights in forced arbitration (binding mandatory arbitration). Almost all credit card contracts with major issuers contain a hidden “forced arbitration” clause. Other loan contracts, such as auto loans, often require forced arbitration as well. Settling legal disputes through arbitration is presented as an alternative that can save time and money, however, in many cases it does neither.

Testimony of Kathleen E. Keest on behalf of the Center for Responsible Lending, Consumer Federation of America, and the National Consumer Law Center before the Subcommittee on Commerce, Trade and Consumer Protection Committee on Energy and Commerce in regards to H.R. 2309: The Consumer Credit and Debt Protection Act.

A quick sampling of credit card issuers’ recent activities in response to the Federal Reserve rule changes that were announced in December 2008 found the top eight issuers--Citigroup, Bank of America, JP Morgan Chase, Capital One, HSBC, Discover, American Express, and Wells Fargo-- are raising interest rates on a larger portion of customers than usual and increasing the number of fees they impose.

This report demonstrates that credit card “payment allocation” policy can be both expensive and confusing for credit card customers and shows that allocating payments to the lowest rate first is harmful to borrowers, highly deceptive, and inconsistent with risk-based pricing.

While credit card companies compete to offer the lowest "headline" rates in solicitations, they also depend on less obvious tactics to boost their financial returns. Repricing customers based on penalty triggers is a common revenue-boosting strategy. This CRL study shows that penalty repricing leads people to underestimate the interest they are paying and that credit card issuers try to keep it that way. Furthermore, it shows that penalty repricing is increasingly common and there is a growing disparity between the size of the penalty and what consumers expect to pay.

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The fear of overwhelming credit card debt is driving many Americans to hand their equity back to mortgage lenders in the form of "cash-out" refinances. Rather than generating cash to invest in the family's future or cover short term emergencies, cash-out refinances frequently serve as equity-draining transactions that only repay ("consolidate") short-term debts, such as credit card balances. Worse, the benefits of refinancing are often temporary, as homeowners build up additional new credit card debt and start the refinance process again.

The survey provides new information about why households are in credit card debt, how long they have carried their debt and the impact this debt has had on their economic security. American families are turning to credit cards to make ends meet in an increasingly volatile economy.