The White House is proposing a new Consumer Financial Protection Agency. This agency will oversee consumer lending and take the consumer side of lending away from the banking regulators who have presided over credit card and mortgage abuses. What will this mean to travelers?
The bill is modeled on the Consumer Product Safety Commission, but this is for financial products.
The agency would have the power to impose fines and refer for criminal prosecution those who engage in unfair, deceptive or abusive acts. It would be able to act when it reasonably concludes the product in question would likely cause “substantial injury” to consumers.
Presumably, this agency will be able to continue the work started by Congress reigning in credit card abuses. Currently, though Congress has passed the recent credit card law, the new rules will not go into effect until next year. In the meantime, the credit card issuers are continuing to ramp up fees and interest rates.
The banks and credit card issuers are also shifting definitions of products in an apparent attempt to circumvent the intent of the law. These changes can be clearly seen with the changes published by credit card issuers regarding foreign transaction fees.
Despite entreaties to Congressmen and committee chairman, these fees were left out of the past credit card bill.
A Consumer Financial Protection Agency might be an organization that takes the consumers point of view rather than simply focusing on the banking industry’s agenda. Foreign transaction fees might an early item on the agency’s agenda. We can always hope.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
