Monday, May 11
Posted 4 p.m.
Bankrate reporter Leslie McFadden contributed this entry.
President Barack Obama urged the need for speed on credit card legislation over the weekend. In his weekly radio and Internet address to the nation Saturday, he stressed the importance of credit card reform. Americans "have a right not to get ripped off by the sudden rate hikes, unfair penalties and hidden fees that have become all too common in our credit card industry," Obama said.
He called for consumer protections previously announced following a meeting last month with credit card executives, including an end to fine print. "We need credit card forms and statements that have plain language in plain sight."
The president noted that it is "past time for rules that are fair and transparent," and said he wants to sign credit card legislation by Memorial Day.
The U.S. Senate begins debating the Credit Card Accountability, Responsibility and Disclosure bill, also known as the Credit CARD bill today. The House already signed off its version of the bill in April.
New credit card rules approved by federal regulators in December will kick in next summer. Both bills codify many of the same protections into law, including limits on rate hikes and an end to "double-cycle" billing, which calculates interest over two billing cycles.
The credit card industry has argued that such reforms would restrict access to credit cards and make them more expensive for everyone.
According to an article in Politico, the bill’s sponsor, Sen. Chris Dodd, D-Conn., reached a compromise with Sen. Richard Shelby, R-Ala., a key republican on the Senate Banking Committee. The committee approved his bill in March by a slim margin and needed more bipartisan support. Their agreement would weaken a provision banning all rate increases on existing balances -- allowing issuers to raise the rate if the cardholder was 60 days or more past due. The original Credit CARD bill prevented such increases even when the cardholder missed payments.
Reportedly, the president is scheduled to hold a town hall meeting this Thursday in Albuquerque, N.M., to continue his push for credit card legislation.
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