Credit Card "Bill of Rights" Gets Key Committee Vote

04/22/2009
WASHINGTON, DC – Today the House Financial Services Committee considered and passed legislation co-sponsored by U.S. Rep. Bill Delahunt that works to curb unfair and deceptive credit card lending practices.

“In this period of economic uncertainty, Americans are turning to their credit cards to make ends meet which has resulted in consumer debt reaching an all time high,” said Delahunt “I’ve heard from far too many constituents who have seen their credit card bills grow because of automatic rate increases and this legislation will help stop these deceptive practices.”

The legislation was authored and introduced by Financial Institutions and Consumer Credit Subcommittee Chair Carolyn Maloney and House Financial Services Chairman Barney Frank. The bill was written after a series of roundtable meetings that Rep. Maloney (D-NY) convened in 2007 with card issuers, consumer groups and cardholders to identify common-sense reforms that could help relieve the pressures consumers feel over unfair credit card company practices. According to the watchdog Consumers Union, credit card companies made $7.4 billion in penalty fees in 2005. It has also been reported that Americans now hold an estimated $850 billion in credit card debt.

The bill was introduced in the 110th Congress in early 2008 and passed the House by a bipartisan 312-112 vote, including 84 Republicans in favor, but was stalled in the Senate.

H.R. 627, The Credit Cardholders’ Bill of Rights:

  • Requires card companies to give cardholders advance notice of an interest rate hike
  • Bans retroactive interest rates increases on existing balances, except where the cardholder is over 30 days late making payment
  • Stops tricks and traps that make cardholders incur rate hikes and pricey fees
  • Gives cardholders more control over their credit limits
  • Prevents card companies from issuing cards to minors

The Credit Cardholders’ Bill of Rights already has the support of leading consumer groups, such as Consumers Union, U.S. PIRG, and the Consumer Federation, as well as The National Small Business Association and The Service Employees International Union (SEIU).

The legislation will now go to a vote before the full House of Representatives.

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