November 26, 2008
Protect Consumers Before Buying Any Securitized Credit Card Debt
The non-profit Consumers Union said today that the federal government should set detailed standards to ensure that consumers are protected before buying any securitized credit card debt from banks and other lenders.
“We need standards to make sure that taxpayer money isn’t used to support credit card practices that harm consumers,” said Gail Hillebrand, Consumers Union Financial Services Campaign Manager.
Consumers Union was responding to the U.S. Treasury Department’s announcement that it will provide $20 billion in bailout funds to back up a Federal Reserve Board “credit facility” program to purchase up to $200 billion in “non-mortgage asset backed paper” – including securitized credit card debt.
Consumers Union called on the Fed to set standards for what credit card debt is eligible for securitized purchase under the program “Before the federal government buys credit card backed securities, there should be an end to retroactive rate increases and high gotcha fees,” Hillebrand said. “Let’s make sure taxpayer money which makes consumer credit available does it in a way that doesn’t harm the U.S. consumer.”
Consumers Union also supports credit card reform in Congress. For more information about the proposed Federal Reserve Board rule and the additional protections proposed in the federal bills, see http://www.creditcardreform.org/learn.html.
Gail Hillebrand 415-431-6747
Pam Banks 202-462-6262