House Approves Credit Cardholders' Bill of Rights

WASHINGTON - The House of Representatives today approved a Credit Cardholders' Bill of Rights bill by a vote of 357 - 70.  "Most of us have felt victimized by unfair and arbitrary credit card rate hikes, late fees and the like.  This bill proposes some restraint," said Rep. Tom Petri, who voted for it.  "We need sensible consumer protections along these lines.  We can't expect everybody to hire a lawyer to go over all that small type before you sign up for a card."

Under H.R. 627, credit card companies would stop:

•   "Double Cycle Billing" by which a card issuer assesses finance charges on balances other than that for the current billing cycle;
• Interest rate increases except under specified circumstance, thus eliminating increases resulting from a cardholder's experience with other creditors;
• Hiking interest rates without 45 days advance notice;
• Applying interest rate hikes retroactively to balances incurred under the old rate;
• Assessing hidden and unjustified interest charges on balances already paid off;
• Piling on debt that consumers owe by requiring them to pay off balances with lower interest rates before those with higher rates;
• Charging late fees even though consumers mail their payments seven days in advance of the due date; and
• Charging excessive upfront fees to subprime cards targeted at consumers with blemished credit histories.

To become law, the bill still needs Senate and presidential agreement.

Separately, Rep. Tom Petri (R-WI) and Patrick Murphy (D-PA) introduced the Student Credit Card Transparency Act which, for procedural reasons, they were not allowed to offer as an amendment to H.R. 627.

The Murphy-Petri bill would provide greater transparency requiring credit card companies to report on their arrangements with colleges and alumni associations when receiving the assistance of those institutions to solicit students for credit cards.

"The question is, are the colleges and alumni groups operating in the interests of the students or simply for the benefit of themselves," said Petri.  "We need to know more about who benefits and by how much, and parents and students need to know that too."