Congress is racing to get legislation completed that will reset the rules for credit card issuers and many banks. Barney Frank is the Chairman of the Committee on Financial Services and, at this point, the last major legislative figure that can change this almost-finished legislation.

The legislation is good and necessary, however, banks and credit card issuers are already making changes to their fee structure that will circumvent the will of Congress and allow them to keep many fees hidden from the American consumers. As fast as Congress writes the laws, credit card issuers are changing terms to evade the spirit of transparency sought by our representatives.

Foreign transaction fees are one of the biggest loopholes left in this bill that will affect all travelers who travel anywhere internationally. This means Canada, Mexico, the Caribbean or on cruises as well as overseas. Here is a letter I sent to Honorable Barney Frank urging him to shut this loophoe before the final legislation passes.

It is time for concerned travelers to send Congressman Frank a note asking for him to require that foreign transaction fees be clearly stated on credit card statements and be justified.

Clear instructions on how to register your concern with Congressman Frank are here. Plus, here is Congressman Frank’s facebook page where you can write on his wall.


The Honorable Barney Frank
United States House of Representatives

Dear Congressman Frank,

Credit card fees have finally come to the attention of Congress. I applaud you for your work in this area that is so important to American consumers.

Unfortunately, foreign currency exchange fees addressed in the bill being voted on by the Senate and coming to the House for a vote this week, are already being circumvented by the credit card industry. Foreign currency exchange fees, other than the mandated one percent Visa/Mastercard exchange fee have been phased out. The new preferred fee for credit card issuers is “Foreign Transaction Fee.”

Last week I received a notice from the Bank of America that the “foreign transaction fee” was being increased and expanded to include any credit card charge handled by a non-US bank, even transactions completed in U.S. dollars. This redefinition of a fee will allow credit cards to continue to hide their fees and to fleece the American public.

If Congress is serious about limiting fees, the foreign transaction fee should be included clearly in the legislation.

A simple change such as adding it to the foreign currency exchange fee wording would do the trick. Plus, these fees should be clearly listed on credit card billing statements.

The intention of this legislation is to allow the American public to clearly see and understand fees being charged by the credit card issuers. Keeping items such as three and four percent foreign transaction fees hidden defeats much of the purpose of this bill.

I urge you to insert “and foreign transaction fees” immediately following foreign currency exchange fees.

The modified section of the bill would read as follows(changes in bold type):

Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended by adding at the end the following:

(o)(3) REASONABLE CURRENCY EXCHANGE FEE AND FOREIGN TRANSACTION FEES- With respect to a credit card account under an open end consumer credit plan, the creditor may impose a fee for exchanging United States currency with foreign currency in an account transaction or processing a foreign transaction only if–

`(A) such fee reasonably reflects the costs incurred by the creditor to perform such currency exchange;

`(B) the creditor discloses on billing statements its method for calculating such fee; and

`(C) the primary Federal regulator of such creditor determines that the method for calculating such fee complies with this paragraph.’.


These small changes will make the bill far more consumer-friendly, especially for anyone traveling internationally to Canada, Mexico, the Caribbean or elsewhere. Plus it would put an end to extra hidden fees imposed whenever a U.S. dollar transaction is conducted by a foreign bank. If there is a rationale for these foreign transaction fees, so be it. However, these fees are capricious — banks charge varying percentages and CapitalOne does not impose such a fee. They are purely a hidden money grab.

I hope that you will move to insert language similar to what I have suggested in order to maintain the spirit of this credit card legislation and to thwart the credit-card-issuer attempt to get around soon-to-be-established legislation.

I would love to have an opportunity to discuss this with you or your staffers.


Charles Leocha
Consumer Travel Alliance

PS: I am a long-time consumer advocate for travelers, author of Travel Rights, a freelancer, former weekend travel guru for MSNBC, co-founder of and of a non-profit, Consumer Travel Alliance. I have just moved to the DC area to begin working more closely with Congress regarding travelers’ affairs.