Bill Ends Industry Abuses, Improves Consumer Protections

Washington, DC – Today, Congressman Joe Baca (D-Rialto) joined a bipartisan majority in the House of Representatives in passing legislation designed to curb unfair and deceptive credit card lending practices.  H.R. 627, the Credit Cardholders’ Bill of Rights, passed the House of Representatives with a 357 – 70 vote.    

“Consumer credit card debt is now closing in on the $1 trillion mark – double the amount held in 1996,” commented Rep. Baca.  “Americans deserve honesty from their credit card companies.  I am proud to support this responsible consumer protection legislation, which will help level the unfair playing field between card companies and cardholders by giving consumers a fair contract.”

Last September, the Credit Cardholders’ Bill of Rights passed the House of Representatives but stalled in the U.S. Senate. In December of 2008, the Federal Reserve, the Office of Thrift Supervision, and National Credit Union Association voted to enact many of the provisions included in the legislation with an effective date of July 2010.

H.R. 627 would speed up the implementation of these provisions.  The legislation curbs unfair and deceptive credit card lending practices by:

• Requiring card companies to give cardholders advance notice of an interest rate hike;
• Banning retroactive interest rate increases on existing balances, except where the cardholder is over 30 days late making payment;
• Stopping tricks and traps that make cardholders incur rate hikes and pricey fees;
• Giving cardholders more control over their credit limits; and
• Preventing card companies from issuing cards to minors.

“For too long America has accepted a culture of consumption at all costs, no matter the consequences,” concluded Rep. Baca.  “As a parent, I am especially pleased to see this legislation prevents credit card companies from preying on minors.  Any by banning retroactive rate hikes on existing balances, increasing advance notice of any rate increases going forward, and giving cardholders more control over their credit limits – we are returning a greater measure of fiscal control to American consumers.  Congress will continue its efforts to level the playing field, and better protect Americans from the predatory practices of big banks.”