Advocates Rip New Fed Report on Credit Cards

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Advocates Rip New Fed Report on Credit Cards

elymiles

11th July 2006

Consumer advocates say a new Federal Reserve Board report about the issuing of credit cards is overly protective of banks. Advocates claim that banks are targeting consumers with low credit scores in order to charge higher rates and fees without first determining the abilities of those borrowers to repay the loans.

Advocacy groups also claim banks continuously increase credit limits on cards even if borrowers do not seek them out.

Banks do not solicit customers or extend credit without first assessing ability to repay, according to the report.

The report came at the request of Congress, which is set to look at how banks offer credit cards, and whether more regulation is needed to protect consumers from falling deeper into debt.

Relatedes: Its all about Supervision: Ben Bernanke | Your Legal Rights: Credit Cards vs. Debit Cards | Credit Card News Briefs