WASHINGTON, DC — Congressman Jeb Hensarling has offered an amendment to help lower interest rates and fees for credit card users.  The amendment clarifies that changes to a credit card agreement that reduce a customer's interest rate or other fees can be implemented immediately, instead of being subject to the 45-day waiting period required under the CARD Act of 2009. The amendment passed the House on a bipartisan vote.

“Earlier this year the House passed legislation instituting a 45-day notice period for changes in the terms of credit cards.  I was contacted by one of my constituents who was told by his credit card company that the company could not lower his interest rate or fees for 45 days due to a law passed by Congress,” said Congressman Hensarling.  “This amendment eliminates that unintended consequence of the earlier bill to clarify that a credit card company may lower fees or interest rates, or take any other action that benefits the consumer, without waiting 45 days.”

Congressman Hensarling said, “It’s a classic case of unintended consequences.”  Hensarling noted that while the CARD Act of 2009 was intended to help consumers, he opposed it because it would force the 95% of card holders who pay their bills on time to bailout the 5% of those who don’t by forcing companies to charge higher interest rates, new annual fees and reduce access to credit.  The Congressman also observed that there could be other unintended consequences of the CARD Act, given that in their haste to pass the legislation, the authors of the CARD Act prohibited credit card issuers from reducing interest rates for 45 days.