Law won't stop 'fleecing': MP Glenn Thibeault, By SUDBURY STAR STAFF AND THE CANADIAN PRESS

New federal legislation proposed by the Conservative government will "fail to stop credit card fleecing," Sudbury MP Glenn Thibeault says.

"Why during this recession are the Conservatives just sitting by while Canadian consumers are still getting fleeced?" Thibeault said Thursday in response to new credit card rules announced by Federal Finance Minister Jim Flaherty.

Thibeault, the federal New Democrats' consumer protection critic, blasted the Conservatives for ignoring a bill he introduced and that was passed in parliament last month. The bill, which was not binding on the minority Conservative government, called for measures to prevent credit card companies from imposing certain fees, penalties and account changes, as well as so-called 'any time, any reason' interest rate increases. The bill also proposed new protections for cardholders who pay on time and for young consumers targeted by aggressive credit card solicitation.

The new rules announced by Flaherty amount to "half-measures" requiring some additional clarity of information, but no limitations on credit card interest rates, Thibeault said.

"Increasing the font size on a credit card contract doesn't help Canadian families who are hurting right now," he said. "Interest rates are at an all-time low, yet credit interest rates remain at an all-time high."

Flaherty said Thursday he has no intention of limiting card interest rates because Canadians have adequate choice in a well-functioning financial system.

"There are dozens and dozens of options for consumers -- some credit cards with higher interest rates offer more frills and benefits and points and various things," the finance minister said at a news conference.

"Our concern is to make sure that consumers have easily available, clear information so that they can mak e informed choices."

The new rules, requiring clearer information and a minimum 21-day interest-free period on new purchases, will cost banks and other credit-card issuers "tens of millions of dollars," Flaherty said.

NDP Leader Jack Layton countered Flaherty's changes merely mean consumers will be told a little more about how they're going to be gouged.

"Today was a day when the banks won, and consumers and the middle class lost," Layton told reporters.

He called for legislation requiring banks to provide no-frills low-interest cards, saying the choice consumers have now is that "they can be gouged, or they can be gouged more deeply."