WASHINGTON — The U.S. House this week approved the Credit Cardholder Bill of Rights on a 357-70 vote, according to a press release from the office of U.S. Rep. Neil Abercrombie, a Hawai‘i Democrat. The legislation was introduced by Rep.
WASHINGTON — The U.S. House this week approved the Credit Cardholder Bill of Rights on a 357-70 vote, according to a press release from the office of U.S. Rep. Neil Abercrombie, a Hawai‘i Democrat.
The legislation was introduced by Rep. Carolyn Maloney (D-NY), who chairs the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, and cosponsored by Abercrombie.
The legislation was introduced last year in response to abusive practices by credit card companies, including unjustified hikes in interest rates, interest rate increases on existing balances and due date changes causing “late” charges. That bill was approved in the House, but blocked by Republicans in the Senate.
“Last year, credit-card companies imposed $19 billion in penalty fees on families with credit cards,” said Abercrombie in the release. “This year, unless we take action, card issuers will break all records for late fees, over-limit charges, and other penalties, pulling in more than $20.5 billion.”
The Credit Cardholders Bill of Rights, H.R. 627, establishes the following rights:
— 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.
— Annual percentage rates increases are prohibited without written notice 45 days in advance.
— 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.
“This legislation levels the playing field between card issuers and cardholders by applying common-sense regulations to ban retroactive interest rate hikes on existing balances, double-cycle billing and due-date gimmicks,” said Abercrombie. “It increases the advance notice of impending rate hikes and gives cardholders information to make decisions about their financial lives.”
Senator Chris Dodd (D-CT) has a similar bill in the Senate which expected to be considered soon.
