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CUNA urges balance in fair credit card bill
WASHINGTON (7/31/08)—The Credit Union National Association (CUNA) backs much of H.R. 5244, the Credit Cardholders’ Bill of Rights Act expected to be voted by the House Financial Serivices Committee today, but urges balance in rules to end discriminatory, predatory, deceptive and abusive lending practices to avoid unintended consequences. Prior to the anticipated House vote, CUNA sent a letter to the bill’s chief sponsor, Rep. Carolyn Maloney (D-N.Y.), recognizing that there are legitimate concerns about abusive credit card practices. CUNA applauded efforts to end credit card and lending abuses. However, CUNA reminded that innovations in the financial services sector, such as the credit card, make credit more available, less expensive, and more convenient for consumers. Credit unions and other financial institutions must be able to price their attendant risks appropriately, the CUNA letter noted. In addition to the Maloney bill, in the Senate the chairman of the banking committee, Sen. Christopher Dodd (D-Conn), has introduced similar legislation (S. 3252). Also in the mix, the Federal Reserve Board, the Office of Thrift Supervision and the National Credit Union Administration (NCUA) issued a joint proposal that addresses several of the concerns raised in the legislation. The joint proposed rule is open for public comment until Aug. 4 and CUNA will submit its comments in the near future. It is expected that the agencies will finalize their plan by the end of the year. CUNA recommended to Maloney that “it may be more prudent to let the regulatory process run its course prior to legislating a remedy.” In fact, that may well be what Capitol Hill intends. The July 30 issue of American Banker noted that lawmakers are unlikely to pass card reform this year, but may be meaning the House vote to send regulators a prod to continue work on their proposed crackdown on abusive lending practices. In a related story, on July 23 fourteen House members—all constituents of the House Financial Services Committee—wrote to their committee chairman to request that one of the panel’s subcommittee’s conduct a hearing on the agencies’ joint Unfair or Deceptive Acts or Practices (UDAP) proposal. The letter to Chairman Barney Frank (D-Mass.) noted the Fed has received more than 20,000 comment letters—identified as 30,000 letters by some sources—on the plan. Use the resource link below for CUNA’s provision-by-provision position on H.R. 5244.
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