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Victory for Consumers on Credit Cards -- Part 1

Today, the United States House of Representatives passed H.R. 5244, the Credit Cardholders' Bill of Rights sponsored by Rep. Carolyn Maloney (D-N.Y.).  Among other provisions, the bill:

  • requires advance notice of credit card account rate increases;
  • prohibits the practice of "double billing," addresses the problem of ever-changing payment dates;
  • restricts the use of over-the-limit transaction fees;
  • restricts "sub-prime" credit cards; and
  • prohibits companies from issuing cards to minors.

This is a great step forward for consumers.  It has been more than twenty years since Congress passed the last major substantive credit card reform legislation.  Public Citizen wholeheartedly supports the Credit Cardholders' Bill of Rights (read our letter of support here), and joined a coalition of other consumer, civil rights and union groups (read the coalition letter here) in support of the bill.

In an interesting look at how Washington works, there were actually two votes on the bill.  The first was procedural -- a motion to send the bill back to the Financial Services Committee for further study. That motion was rejected by a 219-198 margin (roughly).  When it came time to vote on the bill itself, however, the House approved it by an overwhelming 312-112 margin.  This is more proof (if we needed any) that when people are watching, being anti-consumer is not a popular position in Washington.

We are encouraged by today's vote, but this bill will not become law until it has been approved by the Senate as well. The Senate should either move quickly to pass the bill as a stand-alone measure, or include the bill as part of its bailout package expected soon.  There have been repeated cries for greater liquidity to keep our markets  stable.  What could be a better way for the government to provide liquidity than allowing Americans to keep the money that would otherwise be taken from them through unfair and deceptive credit card fees?

Congress should enact H.R. 5244, the Credit Cardholders' Bill of Rights, into law before it goes on recess at the end of next week.

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