Tightening of Credit Card Regulations

By Brian Redhead

Directly catalyzed by the faltering economy, federal regulation of credit card companies is becoming significantly more rigid, aiming to protect the consumer from both predatory as well as deceitful practices. Specifically, in the April, 2009 article entitled “Credit Card Spending Linked to Addiction”, the staff of Talk News Radio allude to a connection between the incurrence of credit card debt and the addictive personality, effectively placing extensive blame on credit card companies for enabling the addictive personality through such common practices as readily offering credit to those already substantially in debt.

By extension, the federal government is beginning to legislatively recognize the role consumer debt has played in causing the economic downturn. Author Jessica Holzer, in her article entitled “Bill-Tightening Credit Card Rules Advances In-House”, asserts that new regulations would ban credit card marketing to minors as well as restrict the ability to offer teaser rates and subjectively change agreement terms. In a similar article, the staff of The Advocate support Holzer’s description of the new bill and offers that new regulations would protect the consumer by not allowing the recession to give an excuse to incur more debt. Additionally, the new bill would protect consumers that pay their bills on time by not allowing unsubstantiated, and indeed unexpected, rate increases.

In essence, new federal regulations would restrict the credit card companies’ ability to deceitfully entice consumers to sign up for potentially hazardous credit terms. In recognition that consumer debt was largely to blame for the economic crisis, the government is hoping to stave a further downturn that would undoubtedly result from struggling consumers opting to obtain easy credit for fear of a job loss or other inability to remain financially sound.

Sources:
http://talkradionews.com/2009/04/credit-card-spending-linked-to-addiction/

http://online.wsj.com/article/SB123869894386283373.html

http://www.stamfordadvocate.com/norwalkadvocate/business/ci_12067067