Victory for Consumers on Credit Cards — Part 1
Today, the United States House of Representatives passed H.R. 5244, the Credit Cardholders’ Bill of Rights sponsored by Rep. Carolyn Maloney (D-N.Y.). Among other provisions, the bill:
- requires advance notice of credit card account rate increases;
- prohibits the practice of "double billing," addresses the problem of ever-changing payment dates;
- restricts the use of over-the-limit transaction fees;
- restricts "sub-prime" credit cards; and
- prohibits companies from issuing cards to minors.
This is a great step forward for consumers. It has been more than twenty years since Congress passed the last major substantive credit card reform legislation. Public Citizen wholeheartedly supports the Credit Cardholders’ Bill of Rights (read our letter of support here), and joined a coalition of other consumer, civil rights and union groups (read the coalition letter here) in support of the bill.
In an interesting look at how Washington works, there were actually
two votes on the bill. The first was procedural — a motion to send
the bill back to the Financial Services Committee for further study.
That motion was rejected by a 219-198 margin (roughly). When it came
time to vote on the bill itself, however, the House approved it by an
overwhelming 312-112 margin. This is more proof (if we needed any)
that when people are watching, being anti-consumer is not a popular
position in Washington.
We are encouraged by today’s vote, but this bill will not become law
until it has been approved by the Senate as well. The Senate should
either move quickly to pass the bill as a stand-alone measure, or
include the
bill as part of its bailout package expected soon. There have been
repeated cries for greater liquidity to keep our markets stable. What
could be a better way for the government to provide liquidity than
allowing Americans to keep the money that would otherwise be taken from
them through unfair and deceptive credit card fees?
Congress should enact H.R. 5244, the Credit Cardholders’ Bill of
Rights, into law before it goes on recess at the end of next week.