Washington, DC – U.S. Rep. John Hall (D-Dover) voted today to bring common sense reform and consumer protections to the credit card industry. The legislation, passed with an overwhelming bipartisan majority of 361 to 64, will now go on to President Obama's desk to be signed into law. The Credit Cardholders’ Bill of Rights will end the unfair practices of the credit card industry and protect consumers from the abusive tactics that have driven so many Americans deeper and deeper into debt.

 

"This Credit Cardholders' Bill of Rights is first and foremost about fairness for consumers who play by the rules but are struggling to make ends meet," said Hall. "These consumers deserve to be treated fairly and honestly by their credit card companies, not hit with the fees and interest rate hikes that drive them deeper into debt."

 

A year long study by The Pew Charitable Trusts' Safe Credit Cards Project found that:

• 100 percent of credit cards contained policies that the Federal Reserve has determined cause substantial harm to consumers.
• 93 percent of cards allowed the issuer to raise any interest rate at any time by changing the account agreement.
• 87 percent of cards allowed the issuer to impose automatic penalty interest rate increases on all balances, even if the account is not 30 days or more past due. The median allowable penalty interest rate was 27 percent per year. 

The bill levels the playing field between card issuers and cardholders by applying common sense regulations that would ban most retroactive interest rate hikes on existing balances (except when payments are more than 60 days late), double-cycle billing and due-date gimmicks.

 

"This is an issue that reaches into the homes and wallets of every American family," said Hall. "No one has been immune to the excessive fees and interest rate gimmicks of the credit card industry. This landmark legislation that we are passing today and that the President has said he will sign, will finally give Americans the information and rights they need to make decisions about their financial lives. Americans deserve fair treatment from their credit card companies."

 

"Passage of the credit card bill is a victory for all consumers and for credit card issuers who want to offer a safe and fair product," said Nick Bourke, manager for the Pew Safe Credit Cards Project. "We are pleased this legislation received strong bipartisan support and that Congressman John Hall voted to stop unfair credit card practices. This bill will help protect consumers from lending policies that the Federal Reserve called 'unfair and deceptive' and that the Pew Safe Credit Card Project's research has shown to be widespread."

 

Specifically, the bill bans most interest rate increases on existing balances and increases notice of interest rate hikes going forward on new purchases. It requires that bills be sent 21 days before the due date; prohibits charging fees just to pay a bill by phone, mail or web; bans over-the-limit fees unless a consumer opts-in in advance; bans due-date tricks; requires payments to be applied fairly to the highest interest rate balance first; and strengthens credit card protections for young people.

 

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