Ever since Bear Stearns collapsed, the Fed has made the news more often than for the occasional interest rate change. Over the last year, they've helped bailout more companies than I can count. Billions and trillions have been doled out to banks to keep them afloat amidst the wreckage they've created for themselves. Almost every one of these financial service institutions have gotten the public money they've requested, so when the consumer comes calling for a little mercy from their credit card debts, the Fed is ready and willing to help, right?
WASHINGTON (Reuters) - The U.S. Federal Reserve rejected a request to force credit card companies to immediately halt retroactive interest-rate increases on existing balances, Democratic Senator Charles Schumer said Tuesday.Why would the Fed be so cruel, so heartless, so dispassionate towards the millions upon millions of Americans that suffer from the deceptive practices of the credit card industry? Well, Bernanke has an answer:
Schumer and Christopher Dodd, who chairs the Senate Banking Committee, asked the Fed last month to use its emergency powers for rescuing banks to also help credit card consumers being slapped with unexpected rate increases.
"The Federal Reserve's failure to protect consumers from these outrageous rate increases is unconscionable," Schumer said.
In a letter to Schumer, Fed Chairman Ben Bernanke, who has called credit card practices "unfair and deceptive," said credit card issuers have been "encouraged" to comply with the Fed's final rules as soon as possible.
He also said shortening the implementation date of the Fed's rules could cause issuers to overreact by cutting the availability of credit and costing consumers more to use a credit card.
"We believe that issuers must be afforded sufficient time for implementation to allow for an orderly transition process that avoids unintended consequences, compliance difficulties and potential liabilities," Bernanke wrote in a May 4 letter.
Basically, credit card companies can cut people's credit down (and they have already, including my own) but as for helping consumers with the actual debt and service charge abuse....Bernanke wants us all to wait for the issuers to reform all on their own. As if credit card companies are eager to suddenly be nice to their
debtors customers after screwing them in their pocketbooks for years on end. If Bernanke believes that, I've got a bridge over the East River to sell him.