TheSenator

http://thomas.loc.gov/cgi-bin/bdquery/z?d110:HR5244:

Democrats protecting American families and of course the Whitehouse opposes it in favor of the corporations.
http://www.reuters.com/article/polit...34253220080922


http://www.creditcards.com/credit-ca...-pass-1282.php
House passes Credit Cardholders' Bill of Rights bill
Bill would give consumers protection against credit card abuses
By Connie Prater

In another blow to the banking industry, the U.S. House of Representatives Tuesday passed a landmark consumer protection measure aimed at leveling the playing field for credit card users.

TCredit cardholder bill of rightshe Democratic-controlled House voted 312-112, mostly along partisan lines, to support the Credit Cardholders' Bill of Rights. The vote came amid a tumultuous week for Wall Street and the credit markets and days before Congress considers an administration plan for a $700 billion bailout of mortgage lenders.

"Amidst the financial turmoil on Wall Street, today the House took steps to help those on Main Street," said Rep. Carolyn Maloney, the New York Democrat and the bill's chief sponsor, who is credited with keeping the bill alive on Capitol Hill despite heavy opposition from banking industry lobbyists. "This historic legislation will help working families who face their own credit crunch as a result of what the Federal Reserve itself calls 'unfair,' 'deceptive,' and 'anti-competitive' credit card practices."

Banking industry reaction
The banking industry was quick to condemn the passage and issued a statement within minutes of the vote. The bill, "while well-intentioned, will increase the cost of credit for consumers and small businesses across the country, result in less access to credit for consumers and businesses alike, and may further roil the securities markets -- all at a time when our economy can least afford it," Edward Yingling, president and CEO of the American Bankers Association, said in a statement.

This historic legislation will help working families who face their own credit crunch ...
-- U.S. Rep. Carolyn Maloney
Sponsor of bill

JP Morgan Chase, the No. 2 U.S. credit card issuer, expressed disappointment at the House vote.

"As an industry leader, Chase does not engage in several practices -- universal default, two-cycle billing and increasing a rate based on a change in a credit score -- addressed by the bill, but we believe the legislation as passed today has the potential of increasing overall costs to consumers, reducing access to credit, and reducing or eliminating low-rate options for consumers," according to a statement issued by Stephanie Jacobson, first vice president of public affairs for Chase Card Services.

The passage may represent a hollow victory for those pushing for real reform. A companion bill would have to pass in the U.S. Senate -- an event seen as unlikely by both Democrats and Republicans. Maloney called on the Senate to "recognize the strong grassroots support for these reforms."

The bill, H.R. 5244, would ban or curtail what consumers and advocates call unfair and arbitrary credit card practices, including interest rate hikes on existing balances, over-the-limit fees, double-cycle billing and fee-harvesting credit cards that charge large upfront fees and offer limited credit.

The bill would also bar issuing credit cards to people under the age of 18 who are not emancipated minors. Also covered in the legislation: Credit card users would have at least 25 days to pay their monthly bills and would not be charged late fees for payments that reached the credit card companies before 5 p.m. on the due date.

Resembles Fed plan
Many of the provisions of the Credit Cardholders' Bill of Rights are also included in a package of proposed rules announced in May by the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration. A Fed spokeswoman has said they expect to finalize those rules by year's end. Opponents of the bill argued that Congress should leave the business of curbing credit card industry practices to federal regulators.

The proposed rules generated a record 56,000 public comments -- mostly from angry consumers relating stories of negative experiences with credit card companies.

Advocates react
"Yahoo!" Linda Sherry, national priorities director for the Consumer Action advocacy group, said in response to the vote. "Now we will turn our attention to the Senate. We'll ask for similar language on credit cards to be added to bailout legislation. "I think this happened now because people and lawmakers are waking up to the fact that you can't keep dumping on consumers. The restructuring must recognize that consumer protection is a core function of regulators and Congress."

Recognizing the need for swift action, Ed Mierzwinski, consumer program director for U.S. Public Interest Research Group (PIRG), said, "Congress is running out of time. But still, a huge victory for consumer protection over abusive credit card companies that have not treated their customers fairly."

Mierzwinski added Tuesday's vote "will send a strong message to the Fed not to weaken the proposed rules."

Tuesday's vote split largely along party lines, but 84 Republicans sided with Democrats to support the measure. Only one Democrat voted against the bill. In a debate leading up to Tuesday's vote, both Democratic and Republican legislators drew parallels between the credit card industry and the current mortgage market crisis -- but for different reasons.

Democrats pointed to the $700 billion commercial credit market bailout proposal as the reason why more consumer protections and oversight are needed. Some representatives called for folding the credit card bill into the bailout plan proposed by the Bush administration.

"We are providing a $700 billion rescue for banks. How can we not provide some basic protections for consumers and Main Street?" asked Maloney during debate earlier in the day.

The credit card bill would "prevent the recurrence of a crisis in credit in credit cards that is happening in our housing industry," said Peter Welch, a Democrat from Vermont.

This comes at a particularly bad time when consumers and our economy have already had enough stress to deal with.
-- Pete Sessions
Republican congressman

Republicans argued that current fears over the credit crunch in the commercial credit market are the reason to stop credit card reforms that could further tighten credit for consumers.

Bad timing?
"Passing legislation like this will discourage lending," said Rep. Pete Sessions, a Texas Republican, who questioned the timing of the vote on the credit card bill given the Wall Street crisis. "This comes at a particularly bad time when consumers and our economy have already had enough stress to deal with."

Added Sessions: "It's not wise policy to create a consumer credit crunch at the same time that our economy is experiencing a commercial credit crunch."

White House opposition
The White House issued a statement Monday expressing opposition to the bill. Although the administration is "concerned about unfair and deceptive credit card practices," they felt curbing abuses was a task best left to the Fed: "Regulations are better suited to addressing these problems than legislation because they can be adapted more readily to changes in market conditions."

In addition, "Legislation likely to result in higher interest rates for consumers is not the answer," according to the statement. The bill "would broadly constrain the ability of financial institutions to price risk, likely resulting in less access to credit and in higher interest rates for consumers," the statement said.

Maloney told her colleagues: "Without legislation, regulation can be stopped or scaled back and lucrative abusive practices can continue."

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kmanrox

cliff notes.. do we still have to pay off cc debt? hehe

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TheSenator

Over-the-Limit Fees
The bill would require creditors to allow cardholders to establish a credit limit that cannot
be exceeded. As such, creditors would be prevented from completing any transaction that
would put the cardholder in excess of their credit limit. Under current practice, most
cardholders are allowed to exceed their credit limit and are charged a fee for doing so. Under
the bill, creditors would be prohibited from charging over-the-limit fees on accounts for
which the cardholder has requested a credit limit that cannot be exceeded. Because the bill
also would require creditors to notify their cardholders of the option to establish a credit limit
and provide the necessary tools for cardholders to do so, the Federal Reserve and industry
representatives believe that many cardholders would elect to use the option. According to
the Federal Reserve and industry sources, this requirement could significantly affect the
amount that creditors collect in fees each year. The industry currently collects billions of
dollars in such fees annually. Even if a small percentage of cardholders elected to use this
option, creditors could lose a significant amount of fees.

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ungratefulninja

I used to work for Chase and maybe they changed their policies but at the time they actively engaged in repricing. I remember a guy that had $45,000 charged on his credit card at a decent interest rate and always paid it on time. His credit score went down from something that didn't involve Chase whatsoever, but they jacked his rate up to like 30% on his existing balance. Basically fucked him over.

from http://www.pbs.org/wgbh/pages/frontl.../credit/eight/

If you've ever looked at the return address on your statement, you may notice your credit card issuer is located in a state such as South Dakota or Delaware. That's because these are the states that have either weak or no "usury laws" meaning there is no cap on the interest rate that is charged. The federal government once had national usury laws that set a cap on the amount of interest that could be charged on a loan. But after the Great Depression, it repealed them and some states put no new usury laws in place. That's why Citibank, the issuer of Mastercard, moved to South Dakota, which has no cap on interest rates.

TheSenator

Credit Cardholders' Bill of Rights Act of 2008 - Amends the Truth in Lending Act to prohibit a creditor from using certain adverse information, including information in a consumer report or any change in a consumer's credit score, as the basis for increasing any annual percentage rate (APR) of interest on the consumer's outstanding balance under an open end consumer credit plan, except for actions or omissions of the consumer directly related to such account. (Thus eliminates the universal default for credit already outstanding.)

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TheSenator

Yeah, bullshit like that happen to me too.

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uno

Sounds good to me.

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Rochard

This just happened to a friend of mine. She always paid her bill on time, and suddenly they jacked up her interest rate up to an amount that should be illegal. Her minimum payments are like $465 and nearly all of it goes towards the interest. She'll be paying off that $20k for the rest of her life.

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Iron Fist

Wow... you have a 5 grand limit but can go over it for another fee? That's insane.. how is someone who doesn't have any self control supposed to learn what a CC is really for with that kind of card? Crazy... glad Canada does have that kind of BS... if I hit my limit, that's IT.. no extra fee if I go over... the sale is declined, just like my debit card.

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