House Passes Maloney's Credit Card Reform Bill
After a long and arduous fight by Congressmember Carolyn Maloney, the House of Representatives resoundingly passed her Credit Cardholders' Bill of Rights reform measure last week by a 357- to-70 vote with a strong bipartisan majority.
The bill, which would provide new and vital protections to millions of Americans, came on President Barack Obama's 101st day in office.
Noting the occasion, Maloney declared: "Today, on the 101st day of President Obama's administration, we in the House leveled the playing field between consumers and credit card issuers by banning most interest rate hikes on existing balances and requiring 45 days' advance notice of any interest rate increases."
Maloney (D- Queens/Manhattan) added, "When it comes to credit cards, doing the right thing and playing by the rules doesn't work for consumers because card companies are engaging in what the Federal Reserve has called 'unfair, deceptive, and anti-competitive practices'. We are changing that with the historic Credit Cardholders' Bill of Rights. By passing this bill, we are helping everyone with a credit card."
Maloney thanked House Speaker Nancy Pelosi (D- California) and Congressmember Barney Frank (D- Massachusetts), chair of the Financial Services Committee and the bill's co-sponsor, for their help and steadfast support and added: "Today, the House sent a message to the American public that responsible regulation is part of the new era of fiscal responsibility—and that responsibility works both ways, for companies as well as consumers."
Obama had signaled support for credit card reform recently and with his help and the addition of a new Democratic member in the upper house, Senator Arlen Spector of Pennsylvania, the landmark bill is expected to win final passage. Maloney said she is hopeful the bill will be signed into law by the president by summer.
The historic bill contains an amendment by Congressmember Gary Ackerman (D- Bayside/Long Island) which prohibits credit card companies from charging customers a fee to pay their bills online or by telephone.
Ackerman, also a member of the Financial Services Committee, described that practice as "outrageous and gluttonous".
The Bayside lawmaker added, "It's like going to the store to buy something and being charged a fee at the register in order to pay for it."
Besides ending arbitrary and unfair rate increases, the bill also prohibits unfair late fees. The only exceptions to raising interest rates include promotional offers, late payments or rates tied to a variable index, like those controlled by the Federal Reserve.
The bill also prohibits charging interest on the total of more than one month's balance, which sometimes results in a customer paying interest on a balance that has already been paid.
The legislation also requires companies to make clearer disclosure and restricts the marketing of cards to college students. The bill also allows cardholders to set limits on their credit and requires the Federal Reserve to report to Congress at regular intervals on the credit card markets.
Meanwhile, U.S. Senator Charles Schumer (D- New York) is supporting Senate proposals that would require credit card applicants under the age of 21 to get their parents' consent to secure a credit card and to take a financial literacy course. The lawmaker would also bar companies from sending pre-screened offers to persons under 21.
According to the Daily News, Schumer recently reported that city college students presently are carrying $1.25 billion in credit card debt, averaging about $3,200 each.
Governor David Paterson also had praise for the new bill and for Maloney. He said credit card reform had been one of the top 10 items he encouraged Congress to pass this year.
"I reiterate that call, and ask the U.S. Senate to give our consumers a Credit Cardholders' Bill of Rights without delay," Paterson said. He also noted President Obama was "pushing the issue".