Washington, D.C. -- "Congress and the President are both working to level the playing field between credit card companies and consumers," said U.S. Representative Neil Abercrombie.  "President Obama and his top economic officials are meeting this week with the heads of the credit card divisions of 14 major banks to let them know that credit card lending abuses will no longer be tolerated.  At the same time, the House Financial Services Committee approved our Credit Cardholders Bill of Rights legislation today, and we believe, the House leadership will bring it to the floor soon for a vote."

Abercrombie co-sponsored The Credit Cardholders Bill of Rights with Rep. Carolyn Maloney (D-NY), who chairs the House Financial Services Subcommittee on Financial Institutions and Consumer Credit.  The legislation was introduced last year and approved by a wide margin, including 84 Republican votes, in the House.  However, it was blocked in the Senate and had to be reintroduced in the 111th Congress.  Senator Chris Dodd (D-CT) has a similar bill in the Senate.

"The country's 180-million credit cardholders have lost the ability to say no to sudden and unfair increases in the interest rates they're being charged or the imposition of all kinds of add-on fees," said Abercrombie.  "Consumers have a right to understand their credit accounts and should be able to control them."

The legislation establishes the following rights for credit cardholders:

• Cardholders will not be subjected to arbitrary interest rate increases.
• Cardholders who pay on time will not be unfairly penalized.
• Cardholders will not be subjected to due date gimmicks.
• Cardholders will be shielded from misleading terms.
• Cardholders may set their own limits on their credit.
• Card companies will apply credits and allocate payments.
• Card companies will not impose excessive fees on cardholders.
• Card companies will not issue subprime credit cards to people who can't afford them.

The Financial Services Committee amended the bill today to prohibit increases in annual percentage rates unless the creditor provides written notice at least 45 days in advance.
In addition to their importance to individual consumers and families, according to the National Small Business Association, in 2008, credit cards were the most common source of financing for America's small-business owners.

"With credit largely unavailable through banks and other lenders in the current economic meltdown, 44% of the country's small-business owners say they've turned to credit cards as a source of financing to meet payroll and other cash flow needs in the last 12 months — more than any other source of financing, including business earnings"  Abercrombie said.  "Fifteen years ago, only 16 percent of small-businesses owners used credit cards to help fund their businesses."

I'm very pleased that President Obama is working with Congress to include credit lending reform as part of the country's economic recovery.  Few parts of our financial system have as much impact on the day-to-day economies of Hawaii families and our small businesses."

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