WASHINGTON — A coalition of minority groups, card issuers, and business organizations has issued a proposal that they hope will keep the needs of low-income consumers for affordable credit from being swallowed up in consumer protection regulations.
Citizens for Equal Access to Credit proposal consists of a statement of principals aimed at legislators and regulators and a code of practices aimed at card issuers. The statement of principals seeks to educated legislators, regulators and the public at large about the goals and concerns of lower income consumers seeking credit while the code of practices seeks to reform some of the practices of issuing cards to lower income consumers.
"We fully support the efforts of regulators to protect consumers, but we definitely want to make sure lower income people keep access to credit," explained Earnest Baynard, spokesman for the group.
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Baynard admits that much of the group's effort right now is aimed at the Federal Reserve and to protecting the ability of card issuers to risk based price their cards. The group fears that if they are prevented from doing so, or if lower income consumers are forced to put up sizable fees up front when they open accounts, the access to the cards will dry up, Baynard explained.
"Seventy million people in this country could not qualify today for a prime rate credit card," Baynard said. "That's one in three consumers. Those people need to have a voice in this process," he added.
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