WASHINGTON (2/8/08)—In another indication that the topic of credit card reform is reigniting on Capitol Hill, five members of the House Financial Services Committee recently asked the Office of the Comptroller of the Currency for its recommendations for improved practices. In a letter signed by three Democrats and two Republicans, the panel members outlined reform proposals currently circulating and requested that Comptroller John Dugan supply his agency’s analysis of the broader impact of each plan of action. “Our primary goal is to ensure that legitimate consumer concerns are aggressively addressed while minimizing the potential negative unintended consequences that may arise thought overly broad legislative solutions,” the letter said. The lawmakers said that given the “ongoing and growing concerns” about the state of the nation’s economy and in light of the 2.5 billion cards in circulation worldwide, the issues involved in reform considerations are “too important .to consumers and financial institutions to “act imprudently.” The letter is signed by Reps. Dennis Moore (D-Kan.), Christopher Shays (R-Conn.), Ed Perlmutter (D-Co.), Michael Castle (R-De.), and Nydia Velazquez (D-N.Y.) and dated Feb. 1. Also on the Hill this week, Rep. Barney Frank (D-Mass.), who chairs the House Financial Services Committee, and Rep. Carolyn Maloney (D-N.Y.), who heads that panel's financial institutions subcommittee, circulated a “Dear Colleague” letter asking fellow House members for support for credit card reforms. (See News Now
, Feb. 7) Specifically, the letter to Comptroller Dugan requests analysis of proposals, including:
* Prohibiting issuers from determining pricing of credit card rates based on reasons unrelated to whether cardholders have paid their bills on time; * Setting limits on the maximum interest rate that can be applied to credit cards; * Improving the timing and adequacy and clarity of credit card disclosures; and * Requiring allocation of payments to higher rate balances first, or to apply payments on a pro-rata basis to outstanding balances subject to different interest rates, such as promotional rate balances vs. new balances or cash advances.