Credit card reform bill passes House by vote of 357-70
Riding a crest of populist anger, the House on Thursday approved a bill to restrict credit card practices such as sudden increases in interest rates and late fees that have entangled millions of consumers.
The legislation passed 357 to 70 after lobbying by President Obama and members of his administration. It would prohibit so-called double-cycle billing and retroactive rate hikes and would prevent companies from giving credit cards to anyone younger than 18.
If enacted into law, the measure wouldn’t take effect for a year, except for a requirement that customers get 45 days’ notice before their interest rates are increased. That would take effect 90 days after the bill is signed into law.
Similar legislation is before the Senate, where its prospects appear promising.
“A big vote in the House will create an even bigger momentum as it goes to the Senate,” House Speaker Nancy Pelosi (D-San Francisco) said.
Supporters want to get a final congressional package to Obama by Memorial Day.
Before approving the bill, dubbed the Credit Cardholders’ Bill of Rights, the House adopted a series of amendments that amplified the restrictions on industry practices. The House measure incorporates Federal Reserve regulations due to take effect in July 2010 but goes further by adding restrictions on credit cards for college students.
Double-cycle billing eliminates the interest-free period for consumers who move from paying the full balance monthly to carrying a balance.
Opponents tried vainly on the House floor to temper the bill with amendments that would have given credit card issuers some openings to raise rates within the proposed restraints.