Ed Myska works as executive vice president of El Segundo's Bank of Manhattan, so it's pretty fair to say that he knows a thing or two about keeping his financial house in order.
Yet he was among numerous people who have been notified by Citibank in recent days that the interest rate on their credit cards is soaring to almost 30%.
Letters being mailed out by Citi say only that the rate increase will allow the company "to continue to provide our customers with access to credit."
Myska told me he seldom carries a balance for more than a couple of months and never misses a payment. He now plans to burn off the mileage accumulated on his plastic and then switch to another card.
"If we ran our bank the way Citi runs theirs, we wouldn't be in business," Myska said. "Our clients wouldn't put up with it -- and they shouldn't have to. Fees and rates should be fair."
That's precisely the purpose of the Credit Card Accountability, Responsibility and Disclosure Act, which President Obama signed into law in May. Most of the law's protections aren't scheduled to take effect until Feb. 22. Some won't kick in until the end of next summer.
Now some lawmakers are weighing legislation that would accelerate introduction of the credit card reforms to Dec. 1 as banks like Citi turn the screws on customers with higher rates and less-favorable contracts.
Is that a good idea? Rep. Spencer Bachus of Alabama, the ranking Republican on the House Financial Services Committee, put that question to Federal Reserve chief Ben S. Bernanke. And the Fedmeister issued his response last week.
Speeding up the law "could benefit consumers by providing important protections earlier than scheduled," Bernanke acknowledged.
But he said that "card issuers must be afforded sufficient time for implementation to allow for an orderly transition and to avoid unintended consequences, compliance difficulties and potential liabilities."
And I'm thinking, yeah, I'd sure hate to see any unintended consequences for the credit card industry. Like maybe having to treat customers fairly.
The sole reason lawmakers are cracking down on card issuers, and are now thinking about picking up the pace, is that banks have consistently proved themselves to be unworthy of consumers' trust.
Basically, if there's money to be made via some new fee or strong-arm practice, the banks have done it. Tony Soprano and his crew pretty much operated the same way.
