Senate Committee to Start Examining Credit Card Industry

The U.S. Senate Committee on Banking, Housing and Urban Affairs is scheduled to start hearings on the credit card industry Thursday at 9:30am.  The official title for the hearing tomorrow, according to the committee’s web site, is “Examining the Billing, Marketing, and Disclosure Practices of the Credit Card Industry, and Their Impact on Consumers.”

The new Chairman of the committee, Christopher Dodd (D-CT), has already vowed to put credit card issuers’ practices under a microscope.  He has been seeking changes such as clamping down on interest rate increases and fees for customers looking to cancel cards, limit card marketing to college students, and increased disclosure of the time it would take cardholders to pay off a balance making only the minimum monthly payment.

As the new Democrat-controlled Congress focuses its attention on the card industry, the American Bankers Association cautioned against taking steps that may increase consumers’ costs to access credit.

Ken Clayton, a spokesman for the group, told MarketWatch in a statement, “We remain hopeful that Congress will take no action that directly or indirectly increases consumer costs, reduces availability of credit or otherwise limits competition or innovation in this very dynamic industry."

The ranking Republican on the committee, Richard Shelby (AL), is eager to take a hard look at the industry but is also withholding judgment on whether to re-write rules just yet.