by Joseph Kenny | 04/18/09

According to recent reports, a new measure is being considered by a House Financial Services subcommittee that would place new restrictions on how lenders like Citigroup and Bank of America can establish their credit card rates and what fees may be charged to customers.

Sponsored by New York Democrat, Representative Carolyn Maloney, and others, this measure, termed the credit card bill of rights, would allow customers to have some said over what sort of limits are placed on their credit. The new bill would totally ban the unilateral revisions on credit card agreements that have so often been used by card issuers to hike interest rates and charge different fees.

The bill is considered long overdue by many in Congress who have heard the stories of many constituents about unfair credit card practices and outrageous fees. Even back in February hearings where similar legislation was being considered, Chris Dodd, the Chairman of the Senate Banking Committee noted that banks were taking advantage of poor regulation to "gouge" the U.S. consumers.

Representative Maloney stated that, "For too long, the playing field has been tilted against the American consumer. We need to ensure consumers have adequate, fair protection."

These latest measures are meant to take the process a major step further than previous efforts on the part of U.S. banking regulators and the Federal Reserve back in December. Slated to go into action by July of 2010, last year's legislation would place limitations on how the rates on existing balances may be increased by banks.

Additionally, Ken Clayton, the senior vice president and general counsel of the American Bankers Association, stated that many credit card companies are saying that tighter regulations on card pricing may lead to a reduction in available credit as well as higher prices. Clayton urged lawmakers to hold off o new legislation in order to judge how effect the Fed's activities will be.

He went on to say that, "Regulators have taken unprecedented action in response to consumer concerns. These changes have forced a complete reworking of the credit card industry's internal operations, pricing models and funding mechanisms."