Last week, the House of Representatives passed the Credit Cardholders Bill of Rights Act by a vote of 312-112.
The bill restricts the credit card industry from continuing practices that inflate late-payments penalties.
Among other new rules, the bill requires that credit card companies give at least 45 days notice to consumers before their interest rates increase and they must stop double-cycle billing.
The bill comes at a time when TransUnion, a leading credit-reporting agency, recently reported that the percentage of people late on their credit card payments has risen in the second quarter from the same time last year.
It also reported that the average debt per credit card holder rose 8.6 percent.
For the quarter ending June 30, 1.04 percent of credit card holders were delinquent at least 90 days on one or more of their credit cards (compared with .91 percent of consumers for the second quarter from the same time last year).
The White House opposed the bill, saying it would ultimately result in higher interest rates for Americans, but it didn’t go as far as threatening to veto it.
Republican opponents said the Federal Reserve is already planning new regulations that would address the issues proponents of the bill are concerned with.
Carolyn Maloney (D-NY), the chief sponsor of the bill and the House Financing Services Financial Institutions Subcommittee chairperson, said much of the language in the bill copies the Fed’s proposed regulations.
The bill now heads to the Senate, where it’s already facing mixed reviews.
Did you know...
...That Chapter 7 bankruptcy was designed to eliminate credit card debt?
Tags: chapter 7 bankruptcy, credit card, Credit Cardholders Bill of Rights Act
This entry was posted on Monday, September 29th, 2008 at 9:28 am and is filed under Credit and Bankruptcy. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.
This law makes sense, increase information. It is better to attack the high credit card debt this way, rather than ban it, or limit the interest rates. When people have full info they can make the decisions they want to make, and will not mind suffering the consequences.
I guess there were more things than the bailout going on.
The problem with the Federal Reserve provisions is that they do not go far enough - as usual. It would not stop most of the credit card industry’s most heinous practices. As always, the Fed is soft on controlling these practices of big banks - the ones with such a huge lobby and pouring so much money into politician’s pockets. Given the current economic mess, getting credit is going to be very tough anyway.. so that argument is moot in the face of the current financial disaster.