By Nathan Duke
The U.S. House of Representatives passed a bill sponsored by U.S. Rep. Carolyn Maloney (D-Astoria) that would regulate credit card industry practices by creating the first cardholders' bill of rights, the congresswoman said.
Maloney, who introduced the bill with U.S. Rep. Barney Frank (D-Mass.), said it would aid credit cardholders during a period of national economic unrest by combating practices by card companies that she called “unfair.”
“Amidst the financial turmoil on Wall Street, the House took steps to help those on Main Street,” Maloney said. “[The] legislation will help working families who face their own credit crunch as a result of what the Federal Reserve itself calls 'unfair,' 'deceptive' and 'anti-competitive' credit card practices.”
The congresswoman said credit card debt has reached a record high of nearly $1 trillion and that the average American household's debt has risen from $2,966 in the early 1990s to $9,840 last year.
Credit card companies issued more than $18 billion in penalty fees on U.S. residents for card balances in 2007, she said.
The bill would require ample notice before rate hikes, protect customers from gimmicks by requiring card issuers to mail bills 25 days before their due date, allow pre-approved consumers the right to reject a card prior to activation without affecting their credit scores, limit companies from issuing cards to individuals under 18 years of age and end double cycle billing, under which companies are able to charge interest on debt that cardholders have already paid on time.
Maloney said the legislation was appropriately passed at a time when President George W. Bush's administration has proposed a $700 billion Wall Street bailout.
“The House sent a message to the American public that responsible regulation is part of the new era of financial responsibility and that responsibility works both ways — for companies as well as consumers,” she said.
Reach reporter Nathan Duke by e-mail at nduke@timesledger.com or by phone at 718-229-0300, Ext. 156.
