FOR IMMEDIATE RELEASE
ICBA Says Additional Credit Card Legislation Would Burden Community Banks and Cost Consumers
Washington, D.C. (March 31, 2009)—Karen Thomas, executive vice president and director of government relations for the Independent Community Bankers of America (ICBA), made the following statement today on the Senate Banking Committee’s narrow passage of the Credit CARD Act (S. 414).
“Our nation’s more than 8,000 community banks are straightforward and trustworthy lenders who generally offer lower rates and fees to their customers and do not engage in abusive credit card practices. Currently, community banks are already expending tremendous resources to comply with the credit card regulations issued in December 2008 by the Federal Reserve, Office of Thrift Supervision, and the National Credit Union Administration. Those new regulations already address the concerns of legislators and consumers, and eliminate practices such as ‘universal default,’ ‘double cycle billing,’ and interest rate increases on existing balances. Implementing these regulations is an enormous undertaking, and legislation such as the Credit CARD Act will only increase costs for community banks and lead to a significant contraction of credit and higher prices for consumers, which would hurt the nation’s economy when it can least afford it.
“While codifying an unproven regulation is generally not advisable, and often leads to unintended consequences that hit hardest on the smaller entities being regulated, if Congress acts on credit card practices, it should do so in a way that mirrors the final regulations. Furthermore, while well-intentioned, this overly restrictive credit card legislation would make it difficult for many community banks to remain competitive in the credit card marketplace. Instead, Congress should focus on ensuring credit card transparency and empowering consumers to make informed financial choices.”
The Independent Community Bankers of America, the nation’s voice for community banks, represents nearly 5,000 community banks of all sizes and charter types throughout the United States and is dedicated exclusively to representing the interests of the community banking industry and the communities and customers we serve. For more information, visit www.icba.org.