House Passes Bill Delivering Blow to Credit Card Industry, High-Five to Consumers
Last week, the House of Representatives passed the Credit Cardholders Bill of Rights Act by a vote of 312-112. The bill restricts the credit card industry from continuing practices that inflate late-payments penalties.
Among other new rules, the bill requires that credit card companies give at least 45 days notice to consumers before their interest rates increase and they must stop double-cycle billing.
The bill comes at a time when TransUnion, a leading credit-reporting agency, recently reported that the percentage of people late on their credit card payments has risen in the second quarter from the same time last year. It also reported that the average debt per credit card holder rose 8.6 percent.
For the quarter ending June 30, 1.04 percent of credit card holders were delinquent at least 90 days on one or more of their credit cards (compared with .91 percent of consumers for the second quarter from the same time last year).
The White House opposed the bill, saying it would ultimately result in higher interest rates for Americans, but it didn’t go as far as threatening to veto it. Republican opponents said the Federal Reserve is already planning new regulations that would address the issues proponents of the bill are concerned with.
Carolyn Maloney (D-NY), the chief sponsor of the bill and the House Financing Services Financial Institutions Subcommittee chairperson, said much of the language in the bill copies the Fed’s proposed regulations.
The bill now heads to the Senate, where it’s already facing mixed reviews.
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