|
No
Credit Card Fee
Exploitation Without
Consumer Representation
Consumer
Group Speaks Out Against
MBNA-Bank of America
Merger,
Issues
Consumer Bill of Rights
for Credit Card Holders
Community
Reinvestment Association
of North Carolina (CRA-NC)
September
27, 2005
WILMINGTON,
DE – The Community
Reinvestment Association
of North Carolina (CRA-NC)
today announced their
opposition to the proposed
merger of MBNA and Bank of
America at a merger
hearing called by the
Delaware State Bank
Commissioner.
The consumer
advocacy group spoke
against the merger and
called for reform of both
companies’ credit card
lending practices.
CRA-NC, based in
Bank of America’s home
state, issued a Consumer
Bill of Rights for Credit
Cards on behalf of the
combined companies’ 40
million active card
holders.
“We
hold this truth to be
self-evident - consumers
have the right to fairness
in lending,” said Peter
Skillern, executive
director of CRA-NC.
“To guarantee a
fair balance of power
between borrowers and
giant lenders like MBNA
and Bank of America,
consumers deserve a bill
of rights for credit
cards.”
The
Consumer Bill of Rights
for Credit Cards is a set
of standards for credit
cards issued in the United
States.
It consists of ten
rights, including consumer
protections against
excessive fees, arbitrary
changes by card companies
to previously-agreed terms
and conditions, and rate
increases on existing
balances.
It calls for fair
billing procedures that
give the benefit of the
doubt to consumers by
accepting postmark due
dates, and consistent
billing cycles, preferably
30 days.
“If
you’re on a 20-day
billing cycle, but pay all
your bills once a month,
you’re being set up for
late fees,” said
Skillern.
“Consumers should
have the right to honest
billing from credit card
lenders, not deceptive
tactics.”
During
his remarks, Skillern also
released a new report from
CRA-NC that gave both MBNA
and Bank of America poor
marks on their credit card
lending practices.
“Stacking Up The
Cards” looks at fees,
billing practices, and
policies that govern
credit cards issued by
both companies, and
measures them against the
standards of the Consumer
Bill of Rights for Credit
Cards.
“Consumers
deserve better,” said
Skillern.
“The credit card
industry, and especially
lending giants like MBNA
and Bank America, must
implement real reforms
that safeguard fair
lending standards for
consumers. This is an opportunity for both companies to do the right
thing.
The Consumer Bill
of Rights for Credit Cards
is a blueprint for change
in the right direction.”
The
full Consumer Bills of
Rights for Credit Cards is
listed below.
CRA-NC’s report
“Stacking Up The Cards:
How MBNA and Bank of
America Measure Up to the
Consumer Bill of Rights
for Credit Cards” is
available from CRA-NC at www.cra-nc.org/stackingupthecards.htm.
Contact:
Peter Skillern at
919-667-1557 x22 or peter@cra-nc.org
Consumer
Bill of Rights for Credit
Cards
1)
Credit card
companies may not
unilaterally change the
price, terms and
conditions during the
credit card agreement
period.
Revised pricing is
prohibited and consumers
are protected from rate
increases on existing
balances for any reason.
2)
Accounting should
be straightforward and
fair to the consumer.
3)
Credit card
underwriting must consider
the borrower’s ability
to repay.
4)
Binding arbitration
is a violation of
consumers’ rights to due
process and is prohibited.
5)
Fees must relate to
the cost of providing
credit services.
6)
Interest rates may
be priced according to
risk, but must be
conscionable.
7)
Billing procedures
must be fair with the
benefit of doubt given to
the consumer, i.e., accept
the postmarked date as
proof of on-time payments
with no arbitrary cutoff
time on the due date.
The billing cycle
must be consistent and
preferably 30 days.
8)
Minimum balance
payments must be
sufficient to reduce the
principle and an
explanation should be
provided of how long and
at what cost repayment of
the existing balance will
take if no further charges
are made.
9)
If the company
approves charges above the
credit limit, then an over
limit penalty may not be
charged without first
granting the borrower an
opportunity to lower the
balance.
10)
Consumers have a
right to clear, simple and
understandable explanation
on the full cost, terms
and conditions for credit
cards.
###
About
the Community Reinvestment
Association of North
Carolina (CRA-NC):
The
Community Reinvestment
Association of North
Carolina is a nonprofit,
nonpartisan research and
advocacy organization
whose mission is to
promote
and protect community
wealth. We advocate
for change in the lending
practices of financial
institutions to promote
wealth building for
underserved communities
and to end predatory
lending practices that
strip wealth.
Committed to creative
advocacy, CRA-NC uses
research, education,
mobilization, media,
litigation, regulatory
challenges, legislative
advocacy and stockholder
actions to initiate
change.
CRA-NC
www.cra-nc.org
(919) 667-1557
114 W. Parrish Street,
Durham NC 27701 |
