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ADA Updates

Tell Congress to Vote Yes on Credit Cardholders Bill of Rights
Posted Dec 01 2009 at 12:18 PM
Updates >>

Update:  Victory!  In an overwhelming vote, the House put consumers first and passed reforms in the credit card industry.  Congratulations to all who lobbied with ADA!

The House is scheduled to vote on a bill that adds fairness for consumers’ battling credit card interest rate schemes.

In recent years, the playing field between credit card companies and credit cardholders has become very one-sided.  Cardholders deserve more bargaining power.  Congress should help to level the playing field.  

The Credit Cardholders’ Bill of Rights Act of 2009, HR 627, would make it harder for credit-card companies to raise interest rates and charge certain fees. The bill would restrict card companies from computing interest charges on balances from more than one billing cycle; prevent card issuers from suddenly raising rates without advance notice, except in specific cases; and direct card companies to apply payments in excess of the minimum to the highest-interest-rate debt or apportion it equally among all of a cardholder’s debts.

HR 627 closely mirrors new regulations that the Federal Reserve plans to put into effect in July of 2010.

H.R. 627, is a comprehensive credit card reform bill, takes a balanced approach to reforming major industry abuses and improving consumer protections for cardholders. Among the bill’s protections, it:  

• Protects cardholders against retroactive interest rate increases on existing balances
• Protects cardholders from due date gimmicks
• Shields cardholders from misleading terms
• Empowers cardholders to set limits on their credit
• Protects vulnerable consumers from fee-heavy subprime cards
• Requires Congress to provide better oversight of the credit card industry

One amendment, supported by President Obama, would require card companies to apply payments above the minimum only to the highest-interest-rate debt first.  A second amendment would require banks to get credit cardholders’ permission before letting cardholders’ to go over their credit limits and charging them a fee for that.  A third amendment would require card companies to disclose on each bill the long-term cost of paying off the balance if only making minimum payments on the balance.

ADAction:  Contact your Representative at (202) 225-3121, and urge him/her to support and vote for the Credit Cardholders’ Bill of Rights, HR 627.