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Press Release

April 30, 2009

House Passes Amendment by Reps. Davis and Carney to Protect Consumers' Credit Scores

Notification would be required 30 days prior to account closure

WASHINGTON – U.S. House of Representatives approved an amendment to help consumers protect their credit scores by requiring credit card companies to provide notification about the company’s intent to close a customer’s credit card account.  The House passed the amendment on a voice vote.

The amendment offered by U.S. Rep. Susan Davis (D-CA) would require credit card companies to notify consumers 30 days before closing a person’s credit card account and provide information about keeping the account open.

Millions of Americans have their credit card accounts closed every year.  Credit card companies can close credit accounts without prior notice.  Because of the way credit scores are calculated, account closures can lower a consumer’s credit score. 

“Often, consumers do not know that their accounts are being closed until after the fact,” said Davis. “By then, it’s too late to protect their credit score.  A good credit score can mean a mortgage for someone’s first home, a school loan, the capital to start a small business, or the ability to buy a car.  Responsible consumers deserve to have advance warning that their credit cards will be closed and their credit scores will be lowered.”

Davis was joined by Rep. Christopher Carney (D-PA) in offering the amendment.

“In these tough economic times it is more important than ever that we do everything we can to protect responsible consumers and borrowers whether they are families who buy their groceries on credit or small businesses that use credit to make payroll or stock inventory,” said Congressman Carney. 

The Davis-Carney Amendment will also require credit card companies to provide consumers with information on programs available to repay the balance and the impact on the holder's credit score as a result of the closure.

The Davis-Carney Amendment was included in The Credit Cardholders’ Bill of Rights Act (H.R. 627).  H.R. 627 would limit the ability of credit card companies to increase interest rates, provide 45 day notice of a pending interest rate increase, and require more disclosure of rates, fees and penalties to consumers.  H.R. 627 passed the House on a vote of 357-70.

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