Selective Interpretation? Top Credit Card Issuers Appear to Follow Own Rules.

CRL offers quick snapshot of recent issuer activity


Center for Responsible Lending
May 8, 2009

We took a quick sampling of credit card issuers' recent activities to see how they have responded to the Federal Reserve rule changes that were announced in December 2008 but won't take effect until July 2010. We found the top eight issuers, who account for 80 percent of credit card balances, are raising interest rates on a larger portion of customers than usual and increasing the number of fees they impose. The new Fed rule will ban some but not all of these activities.

Perhaps most notable is what these issuers—Citigroup, Bank of America, JP Morgan Chase, Capital One, HSBC, Discover, American Express, and Wells Fargo—have not done. All continue to apply a customer's monthly payments to the least costly balance first, leaving the most expensive to continue to grow. None have changed their policy of imposing interest rate hikes for any reason, any time. Additionally, there is no evidence that any of these companies has expanded the period of time between when monthly bills are sent and when late fees apply.

Some issuers have taken moderate steps to implement early a few of the changes the pending Fed rule will bring, such as moving the deadline on due dates to 5 pm and giving more advance notice of interest rate hikes. But for the most important rules, those that could save customers the most, no visible progress has been made. 

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For more information: Kathleen Day at (202) 349-1871 or kathleen.day@responsiblelending.org; Ginna Green at (510) 379-5513 or ginna.green@responsiblelending.org.or Charlene Crowell at (919) 313-8523 or charlene.crowell@responsiblelending.org.

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About the Center for Responsible Lending

The Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help, one of the nation's largest community development financial institutions.