Lowey Calls For Consumer Credit Protection

 

 

“Too many Americans are being saddled with debt that would be avoidable with fair treatment and clear information,” said Lowey. “With the cost of living ever increasing from college tuition to gas, utilities, and healthcare, the last thing consumers need is debt from hidden fees and abusive credit practices. Congress should require credit card companies to notify consumers clearly about their balance, minimum payments, and the cost of their debt.”

 

The Federal Reserve estimates that, adjusted for inflation, in 1968 consumers’ total credit debt was $8 billion, a number that has risen to $880 billion today. In addition, the average interest rate for standard bank credit cards has topped 19 percent this year, compared to 16.5 percent in 2003. The New York State Consumer Protection Board has received over 2,100 credit card related complaints and inquires from New Yorkers since 2006. These disputes range from billing and erroneous charges, exorbitant fees, changes in interest rates, and late payment fees. 

 

Rep. Lowey’s legislation would (1) prohibit creditors from increasing interest rates based on the status of other accounts, a practice known as “universal default;” and (2) require creditors to provide consumers with a clear monthly statement of the minimum payment, the percentage of the balance that the minimum payment represents, and the number of months it would take and the amount it would cost to pay the balance if only the minimum payment is made each month. 

 

Joining Rep. Lowey to call for consumer protection from creditors was Westchester County Department of Consumer Protection Director Gary Brown.

 

“We applaud Congresswoman Lowey’s efforts to abolish the unfair practice of universal default and we urge Congress to adopt this important consumer protection,” said Brown.

 

“When Congress reconvenes in September, we expect to address credit issues,” said Lowey. I will work to include these provisions to rein in abusive practices and to give American consumers the information that they need to protect their financial security.”