Credit grantors and others in the financial industry, including catalogers and direct marketers have agreed not charge late fees to their customers who pay by mail if there is a serious disruption of mail delivery.
The agreement, announced Tuesday by House Financial Committee Chairman Michael Oxley (R-OH) and representatives of the financial industry, basically mirrors a bill Rep. Chris Smith (R-NJ) introduced on Oct. 29, after anthrax was found in the mail stream.
While Smith’s Late Fee Emergency Relief Act (HR-3175) amending the Truth In Lending Act would prohibit credit grantors from charging consumers a late fee for 30 days if a mailed payment is received after the due date because of a serious mail disruption, the agreement extends that period for 30 days beyond the actual period of delivery service disruption.
Credit grantors also agreed not to raise the interest rate on a consumer’s outstanding balance or forward any information about the late payment to a credit reporting agency for inclusion in a consumer’s credit report.
The agreement puts Smith’s bill on hold for at least six months. “It will give us time to see how the agreement is implemented and if there is a need for federal legislation,” Smith’s press secretary, Pete Dickinson, told DIRECT Newsline.
In a statement Smith said that the by reaching the agreement with Congress the financial industry recognizes “that it is wrong to punish consumers whose payments were delivered late through no fault of their own.” Consumer Bankers Association president Joe Belew added in a statement that the industry is “committed to making sure victims [of disrupted mail] are not penalized.”
The agreement “will give credit card customers a break from late fees, increases in interest rates and other adverse credit actions that arise when payments arrive late due to an attack on the mail system,” Oxley said in a statement.
The four-step fee waiving agreement requires Postmaster General John Potter and his successors to notify the House Financial Services Committee, the Senate Banking Committee, the American Bankers Association, and a number of federal and state banking regulators and organizations about any significant disruption of mail service.
In turn those groups must notify their members who must develop policies and practices to deal with the situation, including posting notices about fee waivers on their respective Web sites, notify both news organizations and consumers about the situation.
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