Proposed Legislation
Would Require General Assembly’s Banks Committee
To Conduct Study
Senator Toni Boucher (R-26) recently testified before
the General Assembly’s Banks Committee in favor
of her proposed legislation calling for an analysis
of the range of credit card fees and interest rates
charged consumers.
Under her proposed legislation, SB 173, An Act
Concerning a Study of Usurious Credit Card Rates,
the analysis would be completed by the Banks Committee.
“I recognize most credit card companies employ
best practice procedures regarding the interest rates
they charge consumers. However, in response to several
constituents’ complaints regarding perceived interest
rate gouging on their credit cards, I believe we need
this study,” said Senator Boucher.
Senator Boucher said that several constituents have
contacted her about what they believe to be inexplicably
high credit card fees and interest rates. She said she
has heard from individuals who pay off their credit
cards each month, leaving a zero balance, yet find that
the interest charged them over the course of a year
is as high as 50 percent. Senator Boucher said that,
at first glance, this does not make sense considering
that the federal reserve rate is set at one percent
and the prime rate at four percent. Senator Boucher
said that a comprehensive analysis of these fees and
rates would provide answers for consumers and useful
information for legislators.
“Constituents have told me about interest rate
assessments of more than thirty percent on unpaid balances
without proper notification or explanation of these
unusually high charges. We need to have a discussion
about how these rates and fees are determined. This
study would provide a better understanding to the General
Assembly and the public regarding credit card interest
rates and assessments. An analysis should identify the
reasons behind the perceived abnormally high fees and
rates, and provide recommendations to increase transparency
and communications between credit card companies and
their customers,” said Senator Boucher.
Click here to read Senator Boucher's testimony
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