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Credit Cardholders' Overdue Bill of Rights

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If there was any bill that is overdue, it is the Credit Cardholders Bill of Rights.

Adam Levitin of the blog site Credit Slips has posted on the subject today. Credit Slips is a University of Illinois-based joint site of a group of academics (the other universities represented: Harvard, Georgetown, Michigan, Ohio, and Iowa) concerned with and about credit and bankruptcy issues. Levitin favors the bill, H.R. 5244, introduced by NY Rep. Carolyn Maloney.

Levitin notes that the bill has some omissions -- "it doesn't deal with problems of price structure, rewards programs, antitrust, merchant fees, or identity theft prevention" and he observes that even with the bill, "the card industry might well find other ways to extract rents from unwitting cardholders even if the ways enumerated in the bill are shut down."

Exactly. The bill addresses only the worst abuses of the industry. It should not attempt to solve every problem. The bill has a better chance of sailing through Congress if it obtains the support of some credit card issuers who are following best practices. It should also create an incentive for issuers following best practices to educate the public about the worst practices.

Would we be having our current and future mortgage raft of foreclosures if the public had been better educated about mortgage practices, good and bad? Financial education should be part of the goal of the bill.

Credit Slips says that Rep. Maloney's bill is the most important credit card legislation in 40 years. It concludes that the bill is "an important first step to reining in an industry that has run wild in a regulatory no-man's land of outdated and threadbare federal laws, preempted state laws, and somnolent consumer protection by federal banking regulators."

This is a nice piece of writing. It includes an accessible primer on the ways that consumers have been hoodwinked on a grand scale by the ploys and practices of some credit card issuers. Support the Credit Cardholders Bill of Rights.