Senate Schedules Hearings on Abusive Credit Card Practices

The American Banker reports today that Sen. Carl Levin (D-MI) has scheduled another set of hearings into credit card company abuses for
March 7, 2007. No information on witnesses is available at this time.

Levin in chairman of the Senate Permanent Subcommittee on Investigations which has focused on consumer protection in the credit card industry before. Back in 2004, the PSI looked into the topic of abusive practices in credit counseling.

Last year, Levin asked the Government Accountability Office to study and report on credit card rates and fees, how they have evolved over time, whether they are properly disclosed to consumers, whether increased fees have led to more bankruptcies and finally, how much profit the issuers were making from these fees. In September 2006, GAO issued its report which is full of interesting statistics and charts. Its conclusions in a nutshell: rates and fees are more complex; hard to tell what effect it has had on bankruptcies; notices could be improved; and, while fees are up, card issuers are no more profitable.

UPDATE

The Subcommitte has announced details of the hearings. The hearing will focus on how issuers apply interest rates and fees to credit card accounts. Witnessess from the three largest card issuers: Bank of America, JPMorgan Chase and Citibank.