Bank of America and Citigroup Face Criticism over New Credit Card Fees

Strategic Insights -

U.S. Rep. Michael Arcuri (NY-24) has called on the CEOs of Bank of America and Citigroup to end new credit card interest rates and fees that the two banks plan to charge consumers, citing concerns that these fees prey on customers who have done their part to help the country recover from the economic downturn. The proposed fees come just weeks after Bank of America announced that it would not be raising interest rates before the Credit Card Accountability Responsibility and Disclosure Act (Credit CARD Act) went into effect. The Credit CARD Act, signed into law by President Obama on May 22nd, 2009, aims to increase protections for consumers who have been taken advantage of by credit card companies.

Key Takeaways:

  • Rep. Michael Arcuri has expressed concern over new credit card interest rates and fees imposed by Bank of America and Citigroup, arguing that they prey on customers.
  • Citigroup has begun charging an annual fee for customers who keep a balance on their credit card below $2,400.
  • Bank of America plans to charge an annual fee for customers who do not carry any balance on their credit card.
  • The new fees come just weeks after Bank of America announced that it would not raise interest rates before the Credit Card Accountability Responsibility and Disclosure Act (Credit CARD Act) went into effect.
  • The Credit CARD Act, signed into law by President Obama on May 22nd, 2009, increases protections for consumers and provides leeway in assessing late fees for monthly payments.
  • Rep. Arcuri believes that these banks came before Congress a year ago and asked for federal funding to save their banks, and now they are gouging consumers.
  • The Credit CARD Act aims to provide a fair and transparent credit card market for American consumers.

Statistics:

  • The annual fee for customers who keep a balance on their credit card below $2,400 is implemented by Citigroup.
  • Bank of America is planning to charge an annual fee for customers who do not carry any balance on their credit card.
  • The Credit Card Accountability Responsibility and Disclosure Act (Credit CARD Act) was signed into law by President Obama on May 22nd, 2009.

Sources:

  • Office of New York Rep. Michael Arcuri
  • Credit CARD Act (signed into law by President Obama on May 22nd, 2009)