The Senate committee has begun to call on Flaherty to find a “watchdog” to oversee the credit and debate industries because the federal government has so far failed to restraint the climbing interest rates and fees.This recommendation is directed towards Flaherty’ recent announment proposal to regulate credit cards; the Senate is arguing many of his initiatives “do not go far enough”.
MasterCard Canada and the banking industry have issued a warning that this regulation would hurt consumers and possibly limit credit availability.
Meanwhile, Visa Canada and Interac are still reviewing the possible outcomes.
Retailers are welcoming the report because it will give them tools to manage their card processing costs; which include surcharging consumers.
The Canadian Bankers Association has said it would examine the Senate report in detail but suggested consumers would have to be concerned more about any “unintended consequences” by the regulation.
An example of this could be limiting banks; the ability to provide some services to customers they have come to expect over time. Such as the number of credit card options or reduce available credit to some.
The consumer’s association does not want to cap the interest rates because it could cost consumers many perks, such as airline points or fraud protection.
The main argument is for consumers who rack up a high credit card balance, and with the current interest rate so high people are having a hard time paying it off. I personally do not see why you cannot manage your expenses and pay your bill on time. If you are able to do so, this regulation would be useless, but that is not the case.
We will just have to wait and see what will come about with this regulation.