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WASHINGTON -- A bill protecting consumers from credit card company practices easily passed the House last week, and now goes to the Senate, which could adopt similar legislation as early as this week, The Associated Press reported.
"This is a unique opportunity to end abusive practices that afflict millions of families across the nation, to contribute to our economic recovery and to take a stand for American consumers," Sen. Christopher Dodd, chairman of the Senate Banking Committee and the bill's primary sponsor, told the AP after the House vote. "Now it is the Senate's turn to act."
The House measure, backed by President Barack Obama and called the Credit Card Holders' Bill of Rights, passed Thursday in a 357-70 vote. The bill, which does not address interchange fees paid by merchants to process credit card payments, would prohibit alleged double-cycle billing and retroactive rate hikes, and prevent credit card issuers from giving cards to anyone under 18, the report stated.
"The administration supports Congress' efforts to ... provide additional strong and reliable protections for consumers that ban unfair and abusive practices," the White House said in a statement following the House vote. "The nation's credit card system must have more accountability, including more effective oversight and more effective enforcement of credit card issuers who violate the law."
Obama recently met at the White House with executives of the credit card industry and voiced his desire for a credit card bill to become law.
Supporters want to get the bill to Obama by the Memorial Day holiday, but acknowledged the House passage was just one step, and credit card industry interests could weaken restrictions during the Senate proceedings. If the bill becomes law, the new House provisions wouldn’t take effect for a year, outside of a requirement where customers get 45 days notice before interest rate hikes, which would go into effect in 90 days.
Opponents include the American Bankers Association, which "strongly believes that any additional legislative efforts should strive to achieve the right balance between enhancing consumer protection and ensuring that credit remains available to consumers and small businesses at a reasonable cost," Edward Yingling, president and CEO of the association, said in a statement cited by the AP. "We continue to believe that more work needs to be done to achieve that balance."
House opponents tried to slow the bill’s pace with amendments that would have given credit card issuers the opportunity to raise rates within the new restrictions.
"We shouldn't take credit opportunities away," Republican Rep. Jeb Hensarling, of Texas, said in the report. "I just want consumers to have choices. I want there to be a competitive marketplace."
While Hensarling and other Republican opponents endorsed the requirements for clearer disclosure, they said the legislation overall could prompt lenders to restrict credit in an already tight market to compensate for the new requirements, according to the report.
-- Obama Seeks Protections for Credit Card Users
-- FMI Decries Credit Card Interchange Fee Increases