House Passes Predatory Lender Bill, Enacts Credit Card Bill of Rights
During the month of May, the U.S. House of Representatives acted on legislation to stop predatory lending (H.R. 1728). In addition, the full Congress voted to enact legislation banning certain unfair and deceptive practices by credit card companies (H.R. 627).
The Mortgage Reform and Anti-Predatory Lending Act (H.R. 1728) addresses the recent movement of some lenders away from traditional mortgage practices to more risky, opaque, and unregulated practices. Supporters of the legislation argued that the movement away from traditional mortgages has been bad for both individual borrowers, who wound up paying more for their mortgages in the long-term, and the entire financial system, which felt the “ripple effects” when the practices caused huge losses. H.R. 1728 is meant to subject predatory lenders to greater financial liability for their actions, while leaving intact the more traditional mortgage practices that have long helped Americans to obtain homes.
H.R. 1728 passed the House by a vote of 300-114 and is now pending consideration in the Senate. Congressman Todd Platts voted in favor of the bill.
The Credit Cardholders’ Bill of Rights Act (H.R. 627) is meant to make it easier for consumers to manage credit card debt responsibly. Under H.R. 627, credit card companies could increase the annual percentage rates (APR) on existing balances of their consumers only under certain specific circumstances. These circumstances include a consumer being more than 60 days late in making a payment, a promotional rate expiring, or the APR being pegged to a common variable index. If a rate is increased, a 45-day notice period would generally be required.
H.R. 627 also helps ensure that credit card advertisements are accurate in the terms that are used, establishing clear definitions for terms like “fixed rate” and “prime rate.” Other provisions in H.R. 627 would: ban so-called “double cycle” billing, through which credit card companies charge interest on balances that have already been paid off; require credit card statements to include contact information for obtaining the payoff balances; restrict the issuing of credit cards to those under the age of twenty-one; require colleges and universities to publicly disclose any credit card marketing agreements they have entered into with a credit card company; and, require credit card companies to send out statements at least twenty-five days before any due date.
The House passed H.R. 627 by a vote of 361-64, and the Senate passed the bill by a vote of 90-5. Congressman Platts voted in favor of the bill.
Please do not attempt to reply to this message, as it is an unattended mailbox. If you wish to contact me about an issue addressed in this newsletter, or would like more information on what is happening in Congress, please visit my Web site at www.house.gov/platts for more information.
To unsubscribe to this newsletter, please visit my Web site and click the "E-Newsletter" link and follow the instructions.