Barack Obama is likely sign a bill to end abusive credit card practices if the legislation makes its way through Congress. Obama endorsed credit card reform during his Presidential campaign, specifically targeting unilateral rate hikes and rate changes on existing debt.
The Credit Cardholders' Bill of Rights was introduced Thursday by Rep. Carolyn Maloney, D-N.Y., in the House, and Senators Mark Udall, D-Colo., and Charles Schumer, D-N.Y. in the Senate. The legislation would take a number of steps to restrict credit card issuers, including:
- Banning retroactive rate increases on existing balances for cardholders in good standing. Rates could still be raised if a customer were more than 30 days late with a payment.
- Requiring 45 days' notice of all rate increases on new charges.
- Banning "double-cycle billing" which allows fees to be charged for balances that were already paid off.
- Allowing cardholders to cap how much they can charge to their cards, to avoid overdraft fees.
- Outlawing "universal default" clauses, which automatically hike rates on a card based on unrelated financial activity, such as being late paying another bill.
"A credit card agreement is supposed to be a contract, but in recent years cardholders have lost the ability to say no to unfair interest rate hikes and fees," Maloney said in a press statement. "This bill levels the playing field between card companies and cardholders while fostering fair competition and free market values."
Some of those provisions, including the bans on retroactive rate increases and on double-cycle billing, are among new regulations issued by the Federal Reserve and other federal agencies last month. But those new rules don't take effect until July 2010. Under Maloney's bill, the regulations would be enacted within 90 days after the President signed the bill into law.
The House passed a similar version of Maloney's bill last September, but the legislation failed to get out of committee in the Senate. The Schumer/Udall Senate version now goes up against the Credit Card Accountability, Responsibility and Disclosure Act, an even stronger bill sponsored by Senator Chris Dodd, D-Conn., head of the Senate Banking Committee.
The Dodd bill would prohibit all retroactive rate increases, regardless of whether cardholders were late with payments, as well as limit what kinds of fees banks may charge their credit card customers.
Comments
Banks are not listening to us. Websites, news papers, TV, contain millions of complaints and the banks don't care. They have been pushing hard to squeeze the consumer out their very last cent...or take thier home.
Home Owners and Credit Card Holders have been suffering silently with no defense against the situation. Legally these creditors have absolute rights and currently we don't. Banks know that we have no control due to the current laws. Yes, a bank can require you to pay more than you can afford in monthly payments and if you cannot they will sue you and you will pay twice as much with lawyer fees. All which can be leined against your property and garnished from your wages. They do not negotiate amicable and affordable repayment terms. No they do not have to lower your rates.
Banks have turned A credit to sub-prime in as little as two months. This activates Universal Default and escalating payments for unrelated accounts. You can find yourself not able to pay your automobile insurance and losing your home because you don't have enough cash to pay your mortgage anymore.
HELP STOP THE CYCLE CAUSED BY THE BANKS!
LET'S TELL THE BANKS THAT WE HAVE POWER TOO!
April 20-24th - Prepare to remove your cash for one entire week! How can banks operate with out our deposits?
Picket bank branches! Organize groups to arrive and picket. Don't forget about the Law Offices such as GHR Lawyers in Salem Oregon which are hired by Wells Fargo that do not negotiate or communicate with debtors.
When employees begin to place phone calls to thier corporate office it is an internal voice.
It is time that we stand up and say I DON'T DESERVE TO BE TREATED THIS WAY!
We need to remove as much as the banks recievied in the stimulus. There are 227,719,424 Adults in the United States if we removed our cash for one week each person on average would have to remove at least $2600 per person to equal $600 Billion dollars. We don't expect you to have $2600 each but, every dollar counts!
We cannot run our lives running on empty so how can the banks? Stand Up for your rights! Stand up and demand negotiations!
- You Betcha - Laura - Oregon
- Megan Miller - California
Brittany Seiver - California
Micheal Stanley - Bellingham, Washington
Diana Krall - Denver Colorado
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