WASHINGTON, DC – The U.S. House of Representatives passed H.R. 3639, the Expedited Card Reform for Consumers Act, on Wednesday to further protect consumers from abusive practices of the credit card industry.  In May, the Credit Card Accountability Responsibility and Disclosure Act (Credit CARD Act) was signed into law, putting in place measures to protect consumers from unfair interest rate hikes on existing balances, double-cycle billing and due-date gimmicks.  H.R. 3639 moves up the effective date for these critical credit card reforms from February 22nd to immediately following the President’s signing this bill into law.  This legislation was introduced in the wake of actions by the credit card companies to raise rates and fees and tighten credit limits before the Credit CARD Act takes effect

Congressman Stupak was not present for the vote in order to attend funeral services for his mother-in-law, Elaine Olsen.  In his absence, Representative Betty Sutton (OH-13) offered Stupak’s amendment to further protect consumers by freezing interest rates on credit card balances until the Credit CARD Act goes into effect under today’s legislation.  Stupak’s amendment was passed by the House.

“For too long the credit card industry has preyed upon consumers through the omission of honest billing practices and through loopholes in credit regulation,” Stupak said.  “Card issuers are raising interest rates and charging extra fees in an attempt to gouge consumers one last time before the Credit CARD Act takes effect.  This bill, along with my amendment, will help finally put a stop to these unfair practices and provide consumers with protection until the measures go into effect.  I appreciate the support of Representative Sutton for offering my amendment in my absence and the work of Representative Maloney to effectively regulate the credit card industry.” 

In the current economic downturn, many families are forced to rely on short-term, high-interest credit card debt to pay for food, housing and other basic necessities.  In Northern Michigan, where unemployment rates range from 6 to 28 percent, families are falling behind on their payments due in part to the predatory practices of the nation’s credit card companies.

Small credit card issuers with fewer than 2 million cardholder accounts and prepaid gift cards already printed with terms and conditions are exempt from the expedited deadline.  However, 80 percent of the credit card market is controlled by the six largest card issuers, who are covered under the bill.

The Credit CARD Act requires credit card companies to give cardholders advance notice of interest rate hikes; bans retroactive interest rate increases on existing balances, except where the cardholder is more than 30 days late making payments; ends deceptive practices that force rate hikes and costly fees on cardholders; gives cardholders more control over their credit limits; and prevents card companies from issuing cards to minors.

The bill now awaits a vote in the U.S. Senate.

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