South Bend, IN- Today, Congressman Joe Donnelly discussed his support of The Credit Card Holders’ Bill of Rights, which passed the House of Representatives yesterday by a strong bipartisan vote of 357 to 70. This legislation would protect credit card holders from unreasonable and deceptive practices by credit card companies.
“For too long now, credit card companies have taken advantage of lax rules and regulations at the expense of consumers,” Donnelly said. “This legislation would level the playing field for cardholders and put an end to unfair practices that are often put in fine print, such as arbitrary interest rate increases and due date gimmicks. This is one more step in our efforts to assist responsible, hardworking Americans who should not be subjected to these practices at any time, much less during a recession.”
H.R. 627 aims to protect cardholders by ending arbitrary interest rate increases on existing balances, requiring credit card companies to give 45 days’ notice of any changes in terms and allowing retroactive interest rate increases only if a cardholder is more than 30 days late with his payment.
In addition, it bans the practice of credit card companies using due date gimmicks and misleading terms that most consumers cannot understand. Finally, the legislation puts in place a requirement for companies to mail billing statements at least 21 calendar days before the due date to ensure that consumers have enough time to make timely payments.
Ms. Judy Motts, a resident of South Bend, joined Donnelly to tell her story about her interest rate being raised without her knowledge. As a result of the steep increase in her interest rate, Motts’ balance rose significantly and she was unable to keep up with her payments. Her credit card debt eventually was turned over to a collection agency, an action that negatively impacted her good credit rating.
“Credit card holders like me need protection from companies who arbitrarily raise our rates without letting us know. This legislation will ensure that no one else has to go through the terrible ordeal of not being able to make a payment because the interest rate has spiked up so high. I applaud Congressman Donnelly for supporting this bill, and I hope it becomes law soon.”
The legislation is now pending before the Senate.
Donnelly supported similar legislation last Congress, but the Senate failed to act on it. It stands a better chance of becoming law this Congress in part because of support from the Obama Administration.
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