Andrews Votes to Expedite Credit Card Reform

Washington, DC – Yesterday, the House of Representatives overwhelmingly approved legislation that would reform the credit card industry sooner than originally planned, providing much-needed relief to the millions of families who rely on credit to make ends meet. This reform comes at a critical time when unemployment continues to skyrocket and our country struggles to work its way out of recession. Originally passed by Congress and signed into law by the President last spring, the Credit CARD Act had three staged implementation dates: August 2009, February 2010, and August 2010. This new legislation fast tracks these reforms and begins to eliminate the credit card industry’s unfair and detrimental practices immediately upon the signing of the bill, rather than gradually implementing the regulations over the next 10 months.

H.R. 3639, the ''Expedited CARD Reform for Consumers Act of 2009,” passed by a vote of 331-92 and established the following provisions to take effect immediately upon enactment:

• Prohibits arbitrary interest rate increases and universal default on existing balances;
• Prohibits issuers from charging over-limit fees unless the cardholder elects to allow the issuer to complete over-limit transactions, and also limits over-limit fees on electing cardholders;
• Requires payments in excess of the minimum to be applied first to the credit card balance with the highest rate of interest;
• Prohibits issuers from setting early morning deadlines for credit card payments;
• Prohibits interest charges on debt paid on time (double-cycle billing ban);
• Requires issuers extending credit to consumers under the age of 21 to obtain an application that contains: the signature of a parent, guardian, or other individual 21 years or older who will take responsibility for the debt; or proof that the applicant has an independent means of repaying any credit extended;
• Requires penalty fees to be reasonable and proportional to the omission or violation;
• Requires that creditors periodically review all interest rate increases since January 2009 and reduce rates when a review indicates that a reduction is warranted.
  

The following provisions already took effect last August 20th:

• Provide increased written notice to consumers of any increases in the interest rate or otherwise makes a significant change to the terms of a credit card account;
• Inform consumers of their right to cancel the card before the rate hike goes into effect;
• Send statements to consumers 21 days before the due date of any payments.
  

“Consumers have been taken advantage of for far too long,” said Congressman Andrews. “With this law, we are limiting the credit card industry’s arbitrary and often abusive practices that have been threatening even the most responsible borrowers for decades.”

As our nation continues to face fiscal and economic struggles, Congressman Andrews continues to support legislation like H.R. 3639 that provides hard-working Americans with the relief needed to endure these difficult times.
 

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