Though the Federal Reserve Board will soon begin enforcing rules that will give consumers additional protection from costly rates and fees, two U.S. senators feel those measures don’t go far enough.
According to a report from the Associated Press, New York Senator Charles Schumer and Iowa Senator Tom Harkin are pushing the Federal Reserve to add rules that would prevent credit card companies from introducing exorbitant penalty fees.
“Credit card companies can still double or triple the interest rate when a consumer falls two months behind on payments,” the senators wrote in a letter to Fed Chairman Ben Bernanke, the AP said.
The AP reported that the Senators said they intend to introduce legislation that will compel the Federal Reserve to enact such protections if it fails to do so on its own.
While the Fed’s new rules will prevent credit card companies from charging hefty fees for late payments, including a measure that makes prohibits them from exceeding the minimum payment associated with the account, it does not prevent high penalty rates.