Credit Card Reform Bill Passes U.S. Senate Vote
The new credit card reform bill known as the "Credit Cardholders' Bill of Rights" passed a U.S. Senate vote with flying colors today. The legislation, which seeks to clarify the fine print in cardholder agreements and level the credit card playing field for consumers, passed the Senate by a 90 to 5 vote.
The credit card reform package will likely still be the subject of some negotiation in the next few days between the Senate and the U.S. House of Representatives, which passed a slightly different version of the bill at the end of April by a 357 to 70 vote. Even so, a final version of the bill is expected to be signed into law soon by President Obama, possibly even before this weekend.
As reported here a few weeks ago, a final version of the Credit Cardholders' Bill of Rights will likely contain the following new credit card safeguards for consumers:
- Require notification of interest rate hikes within at least 45 days of an increase.
- When interest rates increase because of late payments, consumers must be allowed to revert back to earlier lower interest rates if payments are made on-time for a number of consecutive pay periods (i.e. six months).
- Card companies would need to mail bills at least 21 days prior to the payment due date, and customers would be given extra days to pay when due dates falls on Sundays and holiday.
- Card issuers would be required to let cardholders set their own fixed credit ceilings.
The Credit Cardholders' Bill of Rights has gotten off the ground fairly quickly for such a high-profile piece of federal legislation, but there have been a few roadblocks to progress. Last week, the Senate voted to reject a 15 percent cap on credit card interest rates.
Not surprisingly, the credit card industry isn't a huge fan of the new reform legislation, as the New York Times reports: "The industry has asserted that the legislation may backfire, forcing banks to issue fewer credit cards at greater cost to the current cardholders and making credit harder to get at a time when many Americans need it."
- What Might a Credit Cardholders' Bill of Rights Look Like? (FindLaw's Common Law)
- N.Y. Times: Senate Passes Bill to Restrict Credit-Card Practices
- Credit Cardholders' Bill of Rights: Senate Nixes 15% Interest Rate Cap (FindLaw's Common Law)
- Repaying Your Debts (FindLaw)
- Credit Card Debt Relief (provided by Law Office of Thomas P. Hogan)