Deirdre Cummings
Legislative Director, MASSPIRG
617-747-4319
[email protected]
U.S. House Passes Credit Cardholders’ Bill of Rights
Media Contacts
Statement of Deirdre Cummings, MASSPIRG Legislative Director
Rep. Carolyn Maloney (NY) bowled a 300 game today, as the House approved her bi-partisan Credit Cardholders’ Bill of Rights, HR 5244 by an overwhelming 312-112 vote, with all of the Massachusetts Congressional delegation voting in favor of it. The victory sends a strong message to the banks that the Congress, as well as consumers, is tired of their tricks and traps. It also sends a clear message to the Federal Reserve to buck up and resist demands from the banks to weaken its similar rule proposal scheduled to take effect at the end of the year. We intend to push for final passage of the bill by adding it to anticipated Wall Street rescue legislation under consideration this month.
The Maloney bill and the nearly identical Federal Reserve regulatory proposal would ban the worst credit card company practices as unfair and deceptive:
• Banks could no longer raise interest rates to penalty rates of as much as 36% APR on existing balances for consumers who are as little as an hour or a day late; a consumer would need to be 30 days late.
• Banks could no longer raise interest rates to penalty rates of as much as 36% APR on existing balances for consumers who are paid as agreed to that bank, but are either late to some other creditor or have their credit score decline for some other reason, including no reason. This practice is called universal default.
• Among the other provisions of the bill are its ban on double-cycle billing, which is charging interest on amounts you have already paid off last month and its requirement that bills mailed a week in month must be considered to be on time and no late fees can be charged.
For too long, owning a credit card company has been a license to steal. Final passage of the Credit Cardholders’ Bill of Rights will help working Americans avoid crushing credit debt. In the next Congress, we intend to push for additional reforms, including protection for students from unfair credit card marketing on college campuses.”