Comprehensive Bill in the House of Representatives Aims to Stop Industry Abuses and Improve Disclosure While Fostering Fair Competition and Free Market Values
The United States House Financial Institutions and Consumer Credit Subcommittee Chairwoman Carolyn B. Maloney (D-NY) announced her plans to introduce the “Credit Cardholders’ Bill of Rights Act of 2009” in the House, joining with Sens. Charles Schumer and Mark Udall who are sponsoring the companion legislation in the Senate. This comprehensive credit card reform legislation is aimed at leveling the playing field between credit card companies and consumers and abolishes industry abuses that have been described by regulators as “unfair,” “deceptive” and “anti-competitive.”
“A credit card agreement is supposed to be a contract, but in recent years cardholders have lost the ability to say no to unfair interest rate hikes and fees. This bill levels the playing field between card companies and cardholders while fostering fair competition and free market values. It sets no rate caps, fees, or price controls, nor does it dictate any business models to card companies. There is no doubt that credit card companies provide a valuable service and deserve to earn a fair profit, but consumers deserve the right to be able to understand their accounts and be empowered to control them. This bill would give cardholders the information and rights they deserve to make decisions about their own credit,” said Rep. Maloney.
“There has long been a tug of war between credit card companies and consumers" with credit card companies trying to exploit consumers who get in over their heads, and consumers trying to manage their finances the best that they can. It is time that we give the power back to the consumer. This Credit Card Bill of Rights will level the playing field by outlawing predatory practices and banning unannounced, unfair, and deceptive fees and rate increases.” said Sen. Schumer.
“Many Coloradans are hurting, and the financial situation is currently getting worse, not better,” said Senator Udall. "I have pressed for meaningful credit card reform for years, and in partnering with Congresswoman Maloney in the House Financial Services Committee, we were able to pass the Credit Cardholders' Bill of Rights by a veto-proof majority in the House last year. I now look forward to bringing this fight to the Senate with Senator Chuck Schumer, a senior Member of the Senate Banking Committee, and to hopefully presenting President-elect Obama a bill of credit card reforms that he can sign into law,” Udall concluded.
The Credit Cardholders’ Bill of Rights:
Protects cardholders against arbitrary interest rate increases
Prevents cardholders who pay on time from being unfairly penalized
Protects cardholders from due date gimmicks
Shields cardholders from misleading terms
Requires card companies to fairly credit and allocate payments
Empowers cardholders to set limits on their credit
Prohibits card companies from imposing excessive fees on cardholders
Requires Congress to provide better oversight of the credit card industry
Prevents card companies from giving subprime credit cards to people who can’t afford them
Contains NO rate caps, fee setting, or price controls
Background: Last September, the CCBOR (HR 5244) passed the House, 312-112 but died in the Senate. It would have banned many of the worst unfair, deceptive and anti-competitive practices of the credit card industry including so called “universal” default, double-cycle billing, and retroactive rate hikes. In December, the Federal Reserve released final regulations that would ban many of these practices, but the new rule does not take effect until July 2010. The CCBOR introduced today would take effect 90 days after the President signs it.
U.S. House of Representatives Bill sponsors: House Financial Services Committee Chairman Barney Frank (D-MA) and Representatives Paul Kanjorski (D-PA), Maxine Waters (D-CA), Luis Gutierrez (D-IL), Walter Jones (R-NC), Gary Ackerman (D-NY), Emanuel Cleaver (D-MO), Lincoln Davis (D-TN), Keith Ellison (D-MN), Michael Capuano (D-MA), Ruben Hinojosa (D-TX), David Obey (D-WI), George Miller (D-CA), Robert Brady (D-PA), Bob Filner (D-CA) Ed Markey (D-MA), Nita Lowey (D-NY), Peter DeFazio (D-OR), James McGovern (D-MA), John Yarmuth (D-KY), John Olver (D-MA), Donna Edwards (D-MD), Joe Courtney (D-CT), Rosa DeLauro (D-CT), Patrick Kennedy (D-RI), Ben Chandler (D-KY), Dave Loebsack (D-IA), Bill Pascrell (D-NJ), Timothy Bishop (D-NY), Russ Carnahan (D-MO), Anthony Weiner (D-NY), Raul Grijalva (D-AZ), Elijah Cummings (D-MD), Jan Schakowsky (D-IL), Gene Green (D-TX), James Moran (D-VA), Betty Sutton (D-OH), Maurice Hinchey (D-NY), Madeleine Bordallo (D-GU), Barbara Lee (D-CA), Peter Welch (D-VT), Brian Higgins (D-NY) are original co-sponsors of the bill.