Credit Cardholders’ Bill of Rights clears the House 357 to 70

The Credit Cardholders’ Bill of Rights cleared the House 357 to 70 on Thursday, Apr. 30.  The bill, which was created to provide protection for and relief to credit card customers, restricts credit card practices such as sudden interest rate hikes and exorbitant fees. 

The same legislation, save a few changes and amendments, passed the House in September of last year, but died before it could be approved by the Senate.  As a result of continued bipartisanship on the issue, the likelihood of the bill passing the Senate in the next few months is promising at best. 

In addition to the Credit Cardholders’ Bill of Rights, the Credit CARD Act will go before the Senate this session.  The bill, proposed by Sen. Dodd (D-CT), is similar to the Credit Cardholders’ Bill of Rights and also has good prospects.  Both bills reinforce and attempt to codify many of the new pro-consumer rules that the Federal Reserve approved for commencement in July of 2010. 

[ Read more from the Associated Press. ]

Comments

[Cindy]

This is good news but as several have said, perhaps too little, too late?

I have a question, if perhaps someone can answer it for me...

When BoA more than doubled my interest rate, they told me their reason was that I "wasn't paying it off fast enough." Is that not an arbitrary reason? There is no 'due date' for the last payment or set time frame to pay it off.

Does anyone know what part of your credit card agreement/contract allows them to use that as a reason?

Thanks!!

[Kevin D. Johnson]

I agree, Bertie. I couldn't have put it better myself.

[Bertie W.]

Thanks very much for the link.

I understand that the banks and card issuers will need some time to implement the changes. I'm just skeptical that they need *quite* as much time as they claim they do. And if those bills are all about protecting consumers, (as they claim to be) I can't help but notice that none of the politicians have talked about how, exactly, consumers will be protected before the bills take effect. So as far as I can make out, it will be open season on consumers in the meantime.

Granted, requiring card issuers to give 45 days notice of impending interest rate hikes is a change, certainly. I just don't know how helpful a change it will be for consumers. Quickly paying down debt to get out from under isn't an option for everyone, and I'm not so sure that transferring balances around is as easy or beneficial as it once was. That is, the card companies are fully aware when folks are stuck between a rock and a hard place; the terms and conditions of their balance transfer offers are then adjusted accordingly.

Anyway, in the final analysis, yes, 14 months or so is better than the two years the banks et al. were initially seeking.

[Kevin D. Johnson]

Hi, Bertie. There is one portion of the bill that will go into effect immediately if passed. It requires credit card issuers to notify customers 45 days before a rate increase. However, the majority of the legislation wouldn't go in effect until a year later.

While watching the hearings for the different bills, I noticed that the issuers--both banks and credit unions, --pushed hard to delay the implementation to ensure that they can test new systems, reprint materials, train customer service reps, etc. Of course, a delay is in their interest regardless.

Check out the link below. It will help you understand why there was a compromise on when the legislation would go into effect if passed.

Why the Fed's rules don't apply until July 2010: A recap of last week's bill hearing

[Bertie W.]

Perhaps I'm the only person who feels this way, but I'm puzzled as to why this legislation won't go into effect for more than a year. Since most card statements are still mailed to cardholders, updating the terms and conditions of cardholder agreements in a timely manner wouldn't be all that difficult. The proposed changes certainly don't require 14 months to implement.

Something tells me that the card companies will be ratejacking people left and right (as they've already begun doing) during the next 14 months. By the time this legislation kicks in, (assuming it *does* pass) the card companies will have already wrung consumers dry.

Will Rogers always said that, "America has the finest politicians money can buy." I think I'm finally starting to catch on to what he meant.