U.S. House passes credit card bill designed to protect consumers
WASHINGTON -- Riding a crest of populist anger, the House on Thursday approved a bill to restrict credit card practices and eliminate sudden increases in interest rates and late fees that have entangled millions of American consumers.
The legislation passed by a bipartisan vote of 357-70 following lobbying by President Barack Obama and members of his administration.
The measure would prohibit so-called double-cycle billing and retroactive rate hikes and would prevent companies from giving credit cards to anyone under 18.
If they become law, the new measures won't take effect for a year, except for a requirement that customers get 45 days' notice before their interest rates are increased. That would take effect in 90 days.
Similar legislation is before the Senate, where its prospects appear promising.
Consumer advocates and some Democrats have unsuccessfully sought for years to bring new rules to the industry.
Supporters want to get a final congressional package to Obama's desk by the Memorial Day (May 25) holiday.
Before approving the bill, dubbed the Credit Card Holders' Bill of Rights, the House adopted a series of amendments — some of which were pushed by the White House — that amplified the restrictions on industry practices.
The House measure incorporates Federal Reserve regulations due to take effect in July 2010 but goes further by adding restrictions for credit cards for college students.
Double-cycle billing eliminates the interest-free period for consumers who move from paying the full balance monthly to carrying a balance.
Supporters of the bill also drew on the economic crisis to make their case.
"Americans deserve a fair shake," said Ed Perlmutter, a Colorado Democrart. The credit card industry "has taken advantage of millions of vulnerable Americans."
Rep. Carolyn Maloney, a New York Democrat, the bill's chief sponsor, said the changes were needed because "many people are turning to their credit cards because they have lost their jobs."
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