House Approves Credit-Card Reform Bill
The House of Representatives Wednesday overwhelmingly approved revised legislation calling for a major overhaul of credit-card rules.
The vote was 361-64 in favor of the bill and follows a 90-5 vote in the Senate Tuesday.
Passage by the House, which had approved a less stringent version of the Senate bill three weeks ago, keeps the legislation on a fast track, meeting President Barack Obama's request to send him something to sign into law by Memorial Day weekend.
(In a rare legislative twist, the House decided to vote separately on an amendment--tacked onto the legislation in the Senate--allowing guns to be carried in national parks. That measure passed by a 2-to-1 margin.)
The bill would require lenders to post their credit card agreements on the Internet and let customers pay their bills online or by phone for free. They'd also have to give consumers a chance to spare themselves from over-the-limit fees and give them 45 days notice and an explanation before interest rates are increased.
Public opinion polls have shown strong support for credit card reform and Congressional leaders, as well as the President, seem well aware of that. Eighty percent of American households have credit cards, according to the White House, and pay about $15 billion in penalty fees every year.
Some of the measures in the legislation are also in new rules announced by the Federal Reserve in December 2008. Those Fed rules are not scheduled to take effect until July 2010. Legislation would hasten that implementation.
A recent analysis by the non-profit Center for Responsible Lending found that credit card issuers are generally “raising interest rates on a larger portion of customers than usual and increasing the number of fees they impose.”
Business opposes the legislation, saying it could backfire by limiting credit at a time when the economy is already weak and making fewer consumers qualified for credit cards.
At the same time, the White House, as well as many Democrats in Congress, expect the financial services industry to do more for consumers since it accepted financial aid under the TARP.
The President has taken an active interest in the legislation and is thought to have made his personal preferences on certain measures known to legislators.
Obama and Treasury Secretary Timothy Geithner also went so far as to meet with representatives of the credit card industry at the White House last month.
- AP contributed to this report.