SALON

Wednesday, Oct 7, 2009 10:03 PM UTC

Wells Fargo’s credit card squeeze

The bank thumbs its nose at the Credit Card Act: Never mind the law, we're raising your rates anyway

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Topics: Bank Bailouts, U.S. Economy, How the World Works, Wall Street, Bank Reform, Credit Cards,

The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 is pretty clear: Under the terms of the act, credit card companies will not be allowed to unilaterally raise rates on existing customers for whatever reason they choose.

So what’s a self-respecting credit card company going to do? Why, raise rates before the law goes into effect, of course! A tweet from Felix Salmon alerts us to a Bloomberg News story that is unlikely to be greeted with equanimity by anyone already annoyed by the behavior of large financial institutions in the United States.

Wells Fargo & Co. plans to raise interest rates on a majority of credit-card customers by 3 percentage points before new rules limiting such increases take effect, according to a company executive….

Wells Fargo began advising customers this week that the change takes effect on Nov. 30. Tha’s one day before House Financial Services Committee Chairman Barney Frank wants curbs on rates and fees under the new U.S. credit-card law to become effective. The Massachusetts Democrat plans a hearing tomorrow on moving up the date to Dec. 1 from February to head off increases by card issuers.

Got a feeling Barney’s playing a loser’s game of whack-a-mole there, don’t you?

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21. More Andrew Leonard.

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  • The protests take on a festive element as police forces move out of the park and square. Wearing a gas mask, this young man dances to traditional Turkish music in front of Taksim Square’s Ataturk Monument.

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  • Forming a line, the police face off directly with protesters in Taksim Square. After a while, they retreated and there was a general cheer – a back-and-forth dance that has been common since the beginning of this protest.

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