Rep. Michael Oxley, R-Ohio, chairman of the House Financial Services Committee, outlined the agreement, reached voluntarily by members of the banking industry.
The disruption in mail delivery caused by the anthrax attacks has put many people in the path of late payments through no fault of their own. In some cases, mail was quarantined, tested for anthrax and sent to other mail facilities for distribution as health and law enforcement officials tried to protect the public and postal workers from infection caused by cross contamination of mail.
The delays, however, resulted in late payments on credit cards, mortgages and similar financial instruments that do more than ring up extra fees; they can force a card's interest rate to rise and hurt a consumer's credit rating.
While the industry has been very fair in waiving such fees and penalties after Sept. 11 and the anthrax situation, Oxley said, the agreement gives banking regulators a scoresheet to work with to ensure customers continue to receive fair treatment. The deal established a four-step process to be followed in case of another incident that affects mail delivery:
-- Notification: The Postmaster General would inform House and Senate committees, regulators, the American Bankers Association and the Consumer Banking Association of the post offices and ZIP codes affected, as well as the expected timeframe for fixing the situation.
-- Creditor Alert: Regulators and the associations would promptly pass along the information to credit-issuing companies.
-- Borrower Relief: The creditors would establish policies on waiving fees, etc.
-- Communication: The trade associations would work with the media to inform consumers on how to utilize the new policies.
Rep. Christopher Smith, R-N.J., whose district includes the Trenton mail facility shut down by anthrax-tainted letters, had introduced legislation with goals similar the agreement. The deal protects creditors from fraud by having the government certify what areas are affected, Smith said.
Smith and Oxley, along with Rep. Spencer Bachus, R-Ala., chairman of the Financial Institutions Subcommittee, praised the industry for working with them to avoid the need for passing new laws.
"The bottom line is this agreement we've reached will protect consumers," Bachus said in a prepared statement. "It's a reasonable solution to a new and very serious problem that can wreak untold damage on innocent American families."
"I am very pleased that the financial services industry has agreed to do what is right," Smith said. "Key (industry) leaders ... either have or shortly will put into place policies for their customers to ensure they will not be slammed by ... the recent anthrax crisis."
Edward Yingling, the ABA's executive director of government relations, said creditors had dealt with recent cases on an ad-hoc basis, but Smith's proposed bill gave the industry a model to formalize the process. Joe Belew, the CBA's president, said the deal also will help creditors introduce alternative means of payment, such as check-by-phone and Web-based systems, which are much less vulnerable to disruption of the mail.
The deal cannot cover department store credit cards or utility bills, but Oxley and the others hoped those industries will use the agreement as the basis for their own approaches.
Celebrity Families of 2014 [PHOTOS]