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Credit card reform is long overdue

The United States Senate is debating a long-overdue bill to make sweeping reforms to laws governing credit card companies, including long-standing traditions of raising interest rates on consumers to more than 30 percent even if they have not defaulted on their payments.

Consumers have known for decades that credit card companies are some of the greediest institutions on the planet, bilking customers for late fees and astronomical finance charges which often snowball into insurmountable debt. Members of the Senate itself have called these companies’ tactics borderline criminal and are pushing for legislation that would start mending the problem by forcing credit card companies to give 45 days notice before increasing interest rates and prohibiting retroactive rate increases unless a customer is 60 days late with a payment.

It’s a move in the right direction, but it’s only a start. Independent Sen. Bernie Sanders of Vermont made a bold statement this week, suggesting that credit card companies’ interest rates should be capped at 15 percent. One has to wonder how the companies were ever allowed to exceed that rate in the first place.

The credit card companies themselves are said to be strongly against legislation regarding their practices, but none of them seem to have the courage to get on television and explain their side of the story. With the tide of public opinion against them, they appear keenly aware that their entire business model is a public relations fiasco. Consumers have been victimized for an entire generation under current law, while credit card companies have grabbed as much as they could from disadvantaged Americans to put into the pockets of CEOs and shareholders.

Yes, a cap on interest rates is the right thing to do and yes, the Senate should move quickly with its plan to restore some fairness to credit card lending. The companies crying foul should be thankful to get away with the money they have without going to prison.

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