Wallet Watch

In the time that my blog was sleeping, there’s been some very serious action on the Credit Cardholders Bill of Rights, which has now become the only bill on credit cards to ever pass either chamber of Congress.

When Democrats took control of Congress in 2006, Rep. Carolyn Maloney of New York, the Chair of the Subcomittee on Financial Institutions and Consumer Credit, started a nearly two-year-long process that culminated in the passage of her Credit Cardholders Bill of Rights in the House last week. After four hearings and numerous revisions, the bill that passed the House last week was strong and realistic.

From Consumer Federation of America, one of several consumer groups that were instrumental in getting the bill passed:

The “Credit Card Bill of Rights Act” requires credit card companies to stop:
- Applying unfair interest rate hikes retroactively to balances incurred under the old rate;
- Assessing hidden and unjustified interest charges on balances already paid off;
- Piling on the debt that consumers owe by requiring them to pay off balances with lower
interest rates before those with higher rates; and
- Charging late fees even though consumers mail their payments seven days in advance of
the due date.

Unfortunately, the Senate won’t be able to take up this bill. They were supposed to be done with business for the year by this time, but are sticking around in town for the bailout bill, of course. But regardless of the Senate, the House’s passage of the bill is a significant blow to the industry, which has successfully beaten back bills for years. And moreover, the House’s passage puts pressure on the Federal Reserve — which has a similar although weaker proposal pending on credit cards — not to weaken their proposal before publishing a final rule later this year.