Consumers can choose their credit cards

The study recently released by the Center for Responsible Lending correctly notes that the Credit CARD Act, enacted by Congress in May, was indeed landmark legislation ("Credit card fees bite deep," Business, Dec. 11). Credit card companies are completely revamping their business models in response to recognized expectations of policymakers for a new credit card lending paradigm, and in response to the challenges posed by our down economy.

More importantly, credit card lenders must meet these challenges in a manner that best serves the needs and expectations of consumers. Card companies are hard at work experimenting with new approaches that both comply with the letter and the spirit of the new rules, as well as to ensure that credit cards remain available at mutually beneficial prices to the millions of American consumers and small businesses that rely on them every day.

However, the CRL report inaccurately suggests that the Credit CARD Act and new credit card rules recently adopted by the Federal Reserve do not address the various pricing issues raised by the report. Throughout both the regulatory and legislative process, these issues were in fact discussed and addressed by policymakers.

One important fact should not be lost - consumers are in the driver's seat with respect to what card products they use. They can choose to open card accounts that work for them, and close those that do not. If major terms of their accounts change, they can just say "no." Not only must credit card companies give (as of Aug. 20, 2009) their customers 45-day advanced notice of any proposed interest rate increases or other significant change in terms, they must also provide the customer with the option to decline the rate increase or change. These notices must be disclosed in a clear and conspicuous manner.

Congress has created a new roadmap for how credit cards will be offered in this country. The economy likewise plays a significant role in affecting prices and availability. But, at the end of the day, consumer choice and competition will drive what's offered in the marketplace, and we will all benefit from these changes."

Kenneth J. Clayton

Senior vice president and general counsel for card policy, American Bankers Association

Washington, D.C.