The Center for Responsible Lending, a subsidiary of the Self Help Credit Union, has released a report condemning practices that some of the largest card issuers have adopted, the Center alleged, to avoid the practices banned by new card regulation.
"The May 2009 Credit CARD Act addressed the hidden and deceptive pricing strategies that had been the most costly to credit card users," the report noted in its executive summary. "However, some issuers appear to be working to compensate for part of this lost revenue by instituting or accelerating new practices that increase hidden costs on
consumers. Some of the tactics discussed here are not well known, while others are known but have not been explored in the context of larger trends and impact on credit card borrowers."
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The new report, Dodging Reform: As Some Card Abuses Are Outlawed, New Ones Proliferate, outlined practices such as changing formulas for calculating variable
interest rates in a way that results in rates that average 0.3% higher and adopting so-called "variable rates" that cannot go down from the starting rate for the account, but they can move up.
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