Federal regulators are looking into whether they should implement more regulations into the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 as a way to prevent banks from unfairly imposing more fees on consumers.
Citing its success of the initial CARD Act, regulators are proposing a new CARD Act to crack down on the banks and how they attempt to increase their profits with fees. While banks insist this will reduce the amount of available credit for its consumers, other groups such as the National Consumer Law Center, the Pew Charitable Trusts and the Center for Responsible Lending say the program does not go far enough.
The Consumer Financial Protection Bureau is scheduled to release a study later this year covering the effects of the law and how it affects the availability of credit, as well as whether cardholders are still being hit by unfair practices. The biggest concern is that the CFPB is still looking into payday loans and debt collection practices and may not have the time to look into other violations in the event the new CARD Act takes place.
While the banks have not complained about the current CARD Act, they have objected strongly to any proposed additional regulations. According to the American Bankers Association, credit card rates have increased by 0.73 of a percentage point since late 2008, while consumer credit rates have sharply declined. Despite its criticism of the CARD Act, the NCLC says a lack of available credit may deter banks from allowing subprime cardholders from harmful borrowing.