- The Washington Times - Thursday, May 14, 2009

Congress and the White House are pressing hard to place limits on credit card companies amid an intensifying uproar against the purveyors of plastic.

A Senate bill that would significantly curb the ability of credit card companies to increase interest rates and assess fees and penalties could be voted on as soon as Thursday. The House easily passed a similar but less restrictive measure with broad bipartisan support two weeks ago.

Senate Banking, Housing and Urban Affairs Committee Chairman Christopher J. Dodd, who sponsored the bill in the upper chamber, accused the credit card industry of waging an “assault on the American consumer that is growing by the hour.”

“This bill couldn’t be passed anytime too soon,” said the Connecticut Democrat. “Every day we delay getting this done is one day further consumers will have to put up with these abuses.”

President Obama, who is pressing the Senate to quickly pass the legislation, is expected to talk up the bill during a town hall meeting Thursday in Albuquerque, N.M.

The Senate measure would ban credit card companies from increasing interest rates on existing balances unless a cardholder was 60 days behind payment. Rates on non-delinquent cards would be frozen during the first year a card account was opened.

Any interest-rate increase would be subject to a periodic review and would be lowered if the review determined the increase was arbitrary or unfair.

Credit card issuers would have to give cardholders 45 days’ notice of any increases in interest rates, fees and finance charges. Statements would be required to be mailed 21 days before the bill is due, rather than the current 14 days.

The measure also would prohibit credit card companies from charging interest on paid-off balances from a previous billing cycle, commonly referred to as a “double-cycle billing ban.”

And the bill calls for restrictions that would make it tougher for anyone under 21 to get a credit card.

Sen. Bernard Sanders, Vermont independent, called the credit card industry’s practices extortion and immoral.

“It is loan-sharking with people in three-piece suits,” he said. “And what adds insult to injury is, this is taking place at time when we have put hundreds of billions of dollars to bail out these financial institutions.”

The furor on Capitol Hill aimed at the credit card industry comes as Americans increasingly are getting into deeper credit card debt amid the slumping economy.

A Rasmussen Reports survey released Wednesday shows that 23 percent of Americans say they are at least somewhat likely to miss a credit card payment during the next six months, with 12 percent saying they are very likely to do so.

Sign up for Daily Newsletters

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide