Credit Card Bill to Hit House Floor

The widely-publicized “Credit Cardholders’ Bill of Rights” is expected to see action today on the floor of the U.S. House of Representatives. The legislation is opposed by the White House and many banking groups.

The bill’s primary sponsor, Rep. Carolyn Maloney (D-N.Y.), sent out an advisory late Monday evening alerting interested parties that the bill had been added to the House calendar for Tuesday. Maloney’s office noted that she expected the bill, H.R. 5244, to pass, but that “floor action is unpredictable.”

Opponents of the bill reiterated their complaints Monday. The White House issued a statement saying the bill would hamper banks’ ability to effectively price risk.

"For the credit market to operate efficiently, creditors must have the flexibility to react to changes in customer risk and market conditions," the White House said in the statement. “[The bill] would restrict when lenders may change terms of the credit agreement, significantly constraining the ability of financial institutions to adapt to changing credit risks and market conditions.”

The American Bankers Association announced Monday the launch of CardPolicyInfo.com, a Web site that provides “extensive background information on credit cards, the ongoing legislative and regulatory process, and tips for consumers on using credit cards wisely,” according to ABA’s press release. In particular, the ABA said that the site provides detailed information on the negative impact of “The Credit Cardholders Bill of Rights” and the ABA’s comments on credit card regulations recently proposed by the Federal Reserve, Office of Thrift Supervision and the National Credit Union Administration.

Maloney’s office said again on Monday that the bill would provide numerous protections to credit card consumers in the U.S. Some of the benefits noted by the office include:

• Banning retroactive interest rates increases on existing balances, except where the cardholder is over 30 days late making payment;
• Requiring card companies to give cardholders advance notice of an interest rate hike;
• Stopping “tricks and traps” that make cardholders incur rate hikes and pricey fees;
• Giving cardholders more control over their credit limits; 
• Preventing card companies from issuing cards to minors.