On May 1, 2009, the House of Representatives passed the Credit Cardholders Bill of Rights Act of 2009. The bill received strong bipartisan support, passing by a vote of 357-70, with 252 Democrats and 105 Republicans voting for the measure.
The bill includes provisions that:
– Bar retroactive rate increases on existing balances except for those more than 30 days delinquent.
– Require creditors to give consumers written notice of any rate increase at least 45 days in advance.
– Prohibit double-cycle billing, which allows companies to charge interest on debt that consumers carrying a balance forward have already paid on time.
– Bar creditors from issuing cards to most people under 18.
The bill’s passage was helped by strong support from President Obama and by reports about credit card company practices during the recession, leading to increasing constituent anger.
Opponents of the bill charge that the new law could prompt lenders to tighten credit even further. Rep. Jeb Hensarling, R-Dallas, said that while he was sympathetic to consumer concerns, “the people who are doing it right, who are working hard, trying to pay their bills, are going to be forced to bail out those who don’t.”
Supporters of the bill dismiss those arguments. “In good times and in bad times, the [credit card issuers] have been opposed to this legislation, and we need it now. We are in bad times. Consumers need protection,” says Rep. Carolyn Maloney, D-N.Y.
A Senate version of the bill is expected to be considered soon.