"I’m calling on Congress to take final action to pass a credit card reform bill that protects American consumers so that I can sign it into law by Memorial Day." -- President Obama, 5/10/09
The Senate took up debate on the Credit Card Bill of Rights yesterday, a bill designed to protect consumers from abusive credit card industry practices. The measure passed overwhelmingly in the House of Representatives, and the Washington Post is reporting that key members of the Senate Banking Committee have reached a compromise that could pave the way for passage in the Senate:
Under the compromise bill, card issuers would be allowed to retroactively bump up rates for any borrower whose payments are 60 days past due. However, if the borrower pays on time for six months, the card issuer would have to restore the original rate. The bill also prohibits card issuers from increasing rates during the first year a credit card account is opened and requires them to get customers' permission to set up accounts so that transactions over the limit can be processed. Another provision would require card issuers to post credit card agreements online.
In his weekly address this past Saturday, President Obama urged the Senate to follow the House's lead in passing comprehensive credit card reform, with a goal of signing the bill into law by Memorial Day. He explained:
Americans know that they have a responsibility to live within their means and pay what they owe. But they also have a right to not get ripped off by the sudden rate hikes, unfair penalties, and hidden fees that have become all-too common in our credit card industry. You shouldn’t have to fear that any new credit card is going to come with strings attached, nor should you need a magnifying glass and a reference book to read a credit card application.
...It is past time for rules that are fair and transparent. That is why I have called for a set of new principles to reform our credit card industry. Instead of an "anything goes" approach, we need strong and reliable protections for consumers. Instead of fine print that hides the truth, we need credit card forms and statements that have plain language in plain sight, and we need to give people the tools they need to find a credit card that meets their needs. And instead of abuse that goes unpunished, we need to strengthen monitoring, enforcement, and penalties for credit card companies that take advantage of ordinary Americans.
Once the bill passes, the House and Senate will then have to reconcile the differences between their respective versions before sending a final bill to the president to sign into law.