Ohio Treasurer Lauds Credit Card Reform

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Ohio treasurer Richard Cordray said Thursday that he’s pleased with new federally enacted credit card regulations. The new rules, Cordray says, ban some of the deceptive credit practices used by card issuers and banks.

Cordray says his office submitted more than 5,000 Ohioans’ comments to federal regulators in support of credit card reform. The new rules, Cordray says, were long overdue and will bring relief to struggling families during difficult economic times.

“There’s no question that financial institutions would make more money if they were allowed to gouge their customers with impunity,” Cordray says. “That does not make it right. What we’re saying is, if they’re taking $10 billion out of the pockets of American citizens by unfair practices they should not have those profits.”

Cordray says new federal rules will ban some of the worst practices by credit card companies and banks. One of those practices is raising interest rates without notifying the card holder.

“If you were late, you got penalties and interest and it could pop up your interest rate,” Cordray says. “They now will be required to give you 21 days to pay your bill. They used to be able to bump up the interest rate without any advanced notice without any warning, that ability of theirs is now being restricted. Basically after you’ve had a card for a year they will not be able to change your interest rate and apply it to outstanding purchases without giving you advanced notification. And it will not be applicable to the outstanding purchases.”

Cordray complained that the new regulations would not take effect for a year a half. He said the grace period should only have been three months long.

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