Question
By Alison Vekshin
March 7 (Bloomberg) -- JPMorgan Chase & Co. and Citigroup
Inc., two of the three largest U.S. credit-card issuers, told
Congress they're changing some of the cardholder rates and fees
that lawmakers say unfairly hurt American consumers.
JPMorgan will stop charging customers who exceed their
credit limit a fee after 90 days, Richard Srednicki, chief
executive officer of Chase Card Services, told a U.S. Senate
subcommittee today in Washington. A Citigroup executive said his
company decided last week to stop raising interest rates of
cardholders who miss payments to other lenders.
``In this case, we simply blew it,'' Srednicki said,
apologizing to an Ohio man who testified he ended up with
$10,700 in fees and interest on a $3,200 wedding debt.
The hearing is the second the Senate has held on the credit
cards industry this year, a sign that Democrats who now control
Congress are putting increased emphasis on consumer issues.
Credit cards ``have brought families to their knees with
excessive late and over-limit fees, making it harder for them to
climb out of debt,'' Senator Carl Levin, a Michigan Democrat whois chairman of the Senate's permanent subcommittee on
investigations, said in opening remarks.
Some banks have taken recent steps to improve their
practices ``but more needs to be done,'' Levin said. Senate
Banking Committee Chairman Christopher Dodd, a long-time
industry critic, held a similar hearing in January.
Citigroup Policy
Citigroup took out a full page ad in the Washington Post
yesterday citing the change to its policies. The company also
said it would eliminate account provisions that allow it to
raise rates and fees at any time for any reason.
Senator Norm Coleman of Minnesota, the subcommittee's top
Republican, took issue with the confusing disclosure documents
credit-card companies send to consumers.
``The disclosures contained in card agreements are written
by and for lawyers with an eye more toward staving off
litigation rather than educating consumers,'' Coleman said.
Alys Cohen, a staff attorney at the National Consumer Law
Center, told senators the practices are creating ``a debt crisis
in America'' and urged Congress to ``pass strong legislation.''
Credit-card debt among U.S. consumers is about $9,000 per
household, according to Tamara Draut, program director at Demos,
a New York-based public-policy group.
--Editor: Babcock (krm)
Answer
http://www.citigroup.com/citigroup/press/2004/040917a.htm
old but just as interesting