"We commend the leadership of Senator Dodd and Senator Shelby, the Senate Banking Committee and the Senators whose votes ensured passage of H.R. 627, the Credit CARD Act. This bill, which received overwhelming bipartisan support, will provide consumers with significant protections from industry practices that extract billions of dollars in unfair fees and interest from cardholders every year.
"We applaud the Committee for crafting safeguards for millions of American families at a time when our country is experiencing the worst downturn since the Great Depression. Consumers are the backbone of the economy, and the mortgage crisis is a stark reminder that unfair, deceptive lending practices are bad not only for individuals but for our entire financial system.
"H.R. 627 includes provisions that would go a long way toward restoring fairness and responsibility to the credit card market. The Senate version provides even stronger protections than a similar bill the House passed in April and than rules adopted by the Federal Reserve in December. The much-needed reforms in the bill include:
- Restricting issuers' ability to raise rates on existing balances.
- Requiring 45 days notice before hiking interest rates on new balances.
- Requiring that payment amounts above the minimum payment be applied to the highest interest rate balances first.
- Allowing over-the-limit fees only when a borrower affirmatively consents to having over-the-limit transactions approved.
- Requiring that fees be reasonable and proportional to the violation of terms.
- Prohibiting issuers from charging consumers a fee for paying a bill by telephone or over the Internet.
- Requiring credit card statements to be mailed 21 days before the bill is due rather than the current 14 days.
"As the House and Senate work to reconcile the differences between the bills, we urge the passage of a bill that includes the stronger Senate provisions."
For more information: Kathleen Day at (202) 349-1871 or kathleen.day@responsiblelending.org; Ginna Green at (510) 379-5513 or ginna.green@responsiblelending.org.or Charlene Crowell at (919) 313-8523 or charlene.crowell@responsiblelending.org.