Hopefully the Beginning of the End of a Practice That Should Have Been Stopped Long Ago

From Bloomberg:

Citigroup Ends ‘Universal Default’ on Cardholders (Update3)
By Justin Baer

March 1 (Bloomberg) — Citigroup Inc., the biggest U.S. financial-services company, will stop raising interest rates on credit-card customers who fail to repay loans from other banks, ending a practice that’s drawn scrutiny from Congress.

In addition to revising its policy on so-called universal defaults, Citigroup also will no longer raise rates and fees on customer accounts “at any time for any reason,” the New York- based bank said today in a statement.

Say what you will about the change in control of Congress that took place in November (and yes, this blogger has said plenty), the above move shows that Republicans utterly failed on their watch to rein in abusive lending practices, while at the same time putting the squeeze on consumers by passing “Bankruptcy Reform” (let it not be forgotten, with the help of more than a few Democrats).

“B-R” could have been defended had curbs on outrages like universal default, doubling-up on over-the-limit fees (even if you pay the balance below the limit almost immediately, you still get socked with another over-limit fee on the next statement), ridiculously high “mistake” fees in general, and other reprehensible practices (like this one) been put in place. But apparently the campaign contribution money was too good to pass up.

Now that the Democrats are in charge, financial services firms appear to be reluctantly getting religion. This is no accident. It is occurring because when it had the chance, the supposed party of Main Street gave too much slack to the moneychangers on Wall Street.

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UPDATE, Mar. 10: From Jeff at Credit/Debt Recovery — “Don’t let them fool you… Citibank is still evil… Inside the industry, we know that Citibank is the big bully.”