Friday, March 20
Posted 4 p.m.
Bankrate reporter Leslie McFadden contributed this entry.
Last year the "credit cardholders' bill of rights," aimed at ending egregious credit card practices, passed in the House of Representatives but died in the Senate. Its author, Rep. Carolyn Maloney D-N.Y., reintroduced it as H.R. 627 in January, and Sens. Charles Schumer and Mark Udall, brought sister legislation to the Senate.
Yesterday a House Financial Services Subcommittee began a hearing on the bill.
The proposals largely replicate rules approved in December by credit card regulators. Some of the differences include a ban on issuing cards to un-emancipated minors, and a provision for consumers to set hard credit limits that would prevent over-limit charges and fees. Maloney's bill would also cap issuers at three over-limit fees for the same offending transaction.
Maloney told Bankrate in February that legislation was needed to quicken implementation of the rules, which don't take effect until July 2010, and to make them law, not just regulation.
President Barack Obama will likely stand behind such legislation, given his stance on credit card reform. This week he told an audience at a town hall meeting in California that he would "generally support a credit card bill of rights."
Meanwhile industry proponents oppose rushed implementation of the sweeping consumer protections passed in 2008. Steve Bartlett, the president and CEO of the Financial Services Roundtable, which represents 100 of the nation's largest financial services companies, wrote an opinion piece in USA Today, noting that some congressmen want the rules to take effect within three months. He contends that the result would be restricted access to credit and increased risk. He writes: "Credit card issuers must reprogram and test systems, redesign statements and forms and retrain staff. There is no margin for error. The Fed considered the risk, considered the consumer, considered the margin of error and gave the appropriate amount of time."
Readers, let us know if you receive correspondence from your issuer indicating implementation of the federal regulations. Bankrate will follow the bill of rights as it snakes its way through Congress.
Comments? Questions? E-mail Plastic_Rap@Bankrate.com.