October 6, 2009

Today Senate Banking Committee Chairman Chris Dodd (D-CT) called on credit card companies to follow Bank of America’s commitment to not raise interest rates or change terms on customers until consumer protections included in the Credit CARD Act go into effect.

In a letter to Chairman Dodd, the Director of Bank of America’s Federal Government Relations wrote “Bank of America will not implement any change in terms (risk or economic based) re-pricing of consumer credit card accounts between now and the effective date of the CARD Act.”

“Every other credit card company should follow suit,” said Dodd. “This Congress has made it clear that abusive credit card practices are no longer acceptable.”

Dodd authored the Credit CARD Act, enacted in May, which will prevent unfair increases in interest rates, fees and finance charges on a customer’s existing balance, among other strong new protections against misleading and deceptive practices employed by some credit card companies.

In April Chairman Dodd and Sen. Charles Schumer (D-NY) wrote a letter to Federal Reserve Chairman Ben Bernanke calling on him to use emergency authority to freeze interest rate increases on existing balances for consumer credit cards.

In July, Chairman Dodd sent a letter to the Chairman of the Federal Reserve and the heads of key regulatory agencies directing them to write and enforce strict rules to implement new requirements that credit card companies review rate increases on their customers implemented since January 1st of this year and to notify all credit card companies under their jurisdictions that they will be held accountable for all interest rate increases during this time period.

Full summary of the Credit CARD Act

Below is the full text of the letter:

October 5. 2009

Honorable Christopher J. Dodd, Chairman
Committee on Banking, Housing, and Urban Affairs
United States Senate
Washington, DC 20510-6075

Dear Mr. Chairman:

In light of the concerns expressed to us by our customers, Bank of America will not implement any change in terms (risk or economic based) re-pricing of consumer credit card accounts between now and the effective date of the CARD Act. We believe that this is the responsive to the concerns we have heard and is consistent with other consumer oriented policy changes we have made recently, like giving customers much more control over the risk of incurring overdraft fees and substantially limiting the application of those fees.

Sincerely,

John Collingwood
Director
Federal Government Relations

cc : Hon. Richard C. Shelby

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