Congress Nears Completion of 'Bill of Rights' for Credit Card Owners
Senators are nearing completion on a bill to protect card holders.
May 13, 2009 -- Congress is nearing completion of a bill that would place tough new restrictions on credit card companies and protect card holders from arbitrary rate hikes and other deceptive practices.
Bipartisan support for the bill has swelled and senators could vote this week on a "Bill of Rights" for owners of credit cards. The bill would force credit card companies to give consumers 60 days before changing a credit rating because of late payments and give consumers a path to reclaiming their old rate with six consecutive on-time payments.
Here is an overview, prepared by Democrats, of the bill.
It would also cut down on excessive fees that companies charge for making online payments and would require companies to be clearer about how long it takes to pay down a balance making only the minimum payments.
President Obama called on Congress to send a bill to his desk by Memorial Day.
When 10,000 families are losing their homes every day, 20,000 losing their jobs, the idea that the card companies will go along and raise those rates, add on fees, it's outrageous and it affects every demographic group, not just one income group but across the country," said Sen. Chris Dodd, D-Conn., on the Senate floor Tuesday.
It was a deal between Dodd, who chairs the Senate Banking Committee, and conservative Republican Richard Shelby, who normally preaches the free market, that propelled the legislation to the Senate floor. Support from both sides of the political spectrum is perhaps a symptom of the frustration lawmakers feel in their districts from voters toward credit card companies.
"This legislation addresses some practices that are simply unnecessary. It gives consumers the chance to have a more equitable relationship with the credit card companies and preserves the basic framework necessary of a very important marketplace," said Shelby, a conservative Alabama Republican.