The House Financial Services Committee is reporting here that it has passed the Credit Cardholders' Bill of Rights Act and reported it to the full House.
UPDATE: Here's the Committee press release:
The House Financial Services Committee today approved legislation that would provide credit card customers crucial protections against unfair, deceptive, and anti-competitive credit card practices, which include double-cycle billing, due-date gimmicks, and retroactive interest rate hikes. The bill would also increase the advance notice of impending rate hikes and give consumers the information and rights they need to manage their credit responsibly.
The Credit Cardholders’ Bill of Rights (H.R. 627), sponsored by Rep. Carolyn B. Maloney (D-NY), was passed by a vote of 48 to 19. The bill now moves to the House of Representatives for consideration.
“This landmark legislation helps level the playing field between cardholders and card companies. For too long the relationship has been one-sided; but markets function best when all sides know what they're getting into -- and these deceptive practices need to be stopped. The Credit Cardholders' Bill of Rights brings more transparency to the contractual relationship and give consumers the tools they need to responsibly manage their own credit," Rep. Maloney said.
“The substantial reforms in this bill are needed now more than ever, as working Americans have increasingly turned to credit cards to help pay medical bills, buy groceries, and make ends meet in this troubled economy," Rep. Maloney added.
Specifically, the Credit Cardholders’ Bill of Rights would:
- Protect cardholders against arbitrary interest rate increases
- Prevent cardholders who pay on time from being unfairly penalized
- Protect cardholders from due-date gimmicks
- Prevent companies from using misleading terms and damaging consumers’ credit ratings
- Empower cardholders to set limits on their credit
- Require card companies to fairly credit and allocate payments
- Prohibit card companies from imposing excessive fees on cardholders
- Protect vulnerable consumers from high-fee subprime credit cards
- Bar issuing credit cards to vulnerable minors
The committee also approved the following amendments this afternoon that would:
- Amend the effective date section to provide that, starting 90 days after enactment, no APR increase (except for limited rate increases described in the amendment) could take effect unless the creditor provided a written notice at least 45 days before such increase (Introduced by Rep. Carolyn Maloney)
- Require the Federal Reserve, in consultation with the other federal banking agencies and the FTC, to report to the House Financial Services Committee and the Senate Banking Committee, within 6 months of enactment, the extent to which creditors over the previous 3 years have reduced credit card limits or raised interest rates for individual consumers for reasons relating to general characteristics of their credit transactions, such as where or with whom they shop or how much they pay. (Introduced by Rep. Maxine Waters)
For more information on The Credit Cardholders’ Bill of Rights, click here