Wallet Watch

Last week, the House Committee on Financial Services handed a big victory to credit card holders, and a big slap to credit card companies. The Credit Cardholders Bill of Rights Act, championed by Rep. Carolyn Maloney (D-NY), passed that committee 39-27. Here’s a summary from www.creditcards.com, but also check out this post from Ed Mierzwinski’s US PIRG Consumer blog.

A pro-consumer bill that would abolish unpopular credit card industry practices passed a key U.S. House committee test late Thursday, moving it toward a vote by the full House.

Largely along party lines, members of the House Financial Services Committee voted 39-27 in favor of the Credit Cardholders’ Bill of Rights, which would limit interest rate hikes, fees, and billing and payment practices cited most often by consumers and credit card industry critics. Committee Democrats all voted for it; they were joined by just two Republicans.

The bill targets credit card companies and seeks to ban practices such as retroactive interest rate increases, except under certain conditions, and limits “double-cycle” billing, which increases the ability of card issuers to impose interest charges.

Under the proposed legislation, consumers would get a minimum of 45 days’ notice of any interest rate increases and have at least 25 days between the date of the monthly statement and the due date to pay their bills. Last-minute amendments to the bill added provisions to block credit cards issued to people under 18 years of age and ban over-the-limit fees caused by “holds” placed on the credit card account.

Rep. Carolyn B. Maloney, the New York City Democrat who is the bill’s sponsor, called the vote “a historic victory for American consumers and the free market.”