Committee Statement: "Examining the Current Legal and Regulatory Requirements and Industry Practices for Credit Card Issuers. . ."
Statement of Richard Shelby
U.S. Senate Committee on Banking, Housing, and Urban Affairs
"Examining the Current Legal and Regulatory Requirements and Industry Practices for Credit Card Issuers With Respect to Consumer Disclosures and Marketing Efforts."
May 17, 2005
Washington, D.C. - The purpose of our hearing this morning is to examine current practices in the credit card industry.
As part of this examination, we will consider the nature of the existing legal framework, that is the body of laws and regulations, which govern card issuer and consumer interaction.
Looking back to our numerous hearings on the Fair Credit Reporting Act, it is clear that our credit markets are very competitive and very dynamic. Innovations on many fronts have greatly affected the cost and availability of credit. Constant change, however, has meant less consumer familiarity with the newly available credit products and terms.
Consumer financial literacy plays a key role in allowing consumers to keep pace with market developments. We need to continue to encourage consumer education on this front and, to this end, I look forward to receiving the Department of the Treasury's report on the state of financial literacy. I believe this topic will merit further Committee consideration when this report is released this summer. In light of the significant changes in the marketplace, today's hearing is intended to give the Committee an opportunity to determine how well the rules are working to provide consumers the information necessary to make responsible credit related decisions, as well as to give us a chance to observe the direction in which market forces are headed.
In the end, closely considering these matters is very important due to the unprecedented size and scope of this industry. Today, about 6,000 financial institutions have issued over 640 million credit cards to around 145 million Americans. The impact on the economy is obviously considerable.
I look forward to hearing from the witnesses on this important subject.
http://banking.senate.gov/index.cfm?Fuseaction=Hearings.Testimony&TestimonyID=843&HearingID=154