[StBernard] Credit Cardholders' Bill of Rights Clears Financial Services Committee

[Westley Annis]

April 22, 2009                                                    

 

Credit Cardholders' Bill of Rights Clears Financial Services Committee


WASHINGTON, DC - The House Financial Services Committee today approved
legislation that would provide credit card customers crucial protections
against unfair, deceptive, and anti-competitive credit card practices, which
include double-cycle billing, due-date gimmicks, and retroactive interest
rate hikes. The bill would also increase the advance notice of impending
rate hikes and give consumers the information and rights they need to manage
their credit responsibly.

 

The Credit Cardholders' Bill of Rights (H.R. 627), sponsored by Rep. Carolyn
B. Maloney (D-NY), was passed by a vote of 48 to 19.  The bill now moves to
the House of Representatives for consideration.  


"This landmark legislation helps level the playing field between cardholders
and card companies. For too long the relationship has been one-sided; but
markets function best when all sides know what they're getting into -- and
these deceptive practices need to be stopped. The Credit Cardholders' Bill
of Rights brings more transparency to the contractual relationship and give
consumers the tools they need to responsibly manage their own credit," Rep.
Maloney said.


"The substantial reforms in this bill are needed now more than ever, as
working Americans have increasingly turned to credit cards to help pay
medical bills, buy groceries, and make ends meet in this troubled economy,"
Rep. Maloney added. 

 

Specifically, the Credit Cardholders' Bill of Rights would:

 

*	Protect cardholders against arbitrary interest rate increases 
*	Prevent cardholders who pay on time from being unfairly penalized  
*	Protect cardholders from due-date gimmicks 
*	Prevent companies from using misleading terms and damaging
consumers' credit ratings 
*	Empower cardholders to set limits on their credit 
*	Require card companies to fairly credit and allocate payments  
*	Prohibit card companies from imposing excessive fees on cardholders 
*	Protect vulnerable consumers from high-fee subprime credit cards 
*	Bar issuing credit cards to vulnerable minors 

 

The committee also approved the following amendments this afternoon that
would: 

 

*	Amend the effective date section to provide that, starting 90 days
after enactment, no APR increase (except for limited rate increases
described in the amendment) could take effect unless the creditor provided a
written notice at least 45 days before such increase (Introduced by Rep.
Carolyn Maloney)   

 

*	Require the Federal Reserve, in consultation with the other federal
banking agencies and the FTC, to report to the House Financial Services
Committee and the Senate Banking Committee, within 6 months of enactment,
the extent to which creditors over the previous 3 years have reduced credit
card limits or raised interest rates for individual consumers for reasons
relating to general characteristics of their credit transactions, such as
where or with whom they shop or how much they pay. (Introduced by Rep.
Maxine Waters)   

 

For more information on The Credit Cardholders' Bill of Rights, click here
<http://maloney.house.gov/documents/financial/creditcards/20090115_cc_Onepag
er.pdf> .  

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