Last week, something happened that hasn’t happened in 20 years: the credit card companies lost a battle in the House Financial Services Committee. Late on Thursday night, the committee voted 39-27 in favor H.R. 5244, The Credit Cardholders’ Bill of Rights, a bill supported by consumer advocates including the National Consumer Law Center, Consumer Federation of America, and many others. The last time the banks lost in the FS committee, according to PIRG’s Ed Mierzwinski, was about 20 years ago when they were forced to include some modest disclosures in credit card solicitations (known as the “Schumer Box”).
The Federal Reserve Board actually helped get this bill through because of the pressure created by its own proposal to regulate credit cards. That proposal has received over 40,000 comments from the public, mostly from consumers who support it and are asking the Fed to go even further. Today, August 4, is the last day to add a comment to their process, so click here to get your word in.
Here’s some of what the bill would accomplish: it would eliminate so-called double-cycle billing, force companies to apply payments fairly (not to the balance with the lowest interest first as they do now), limit retroactive interest rate hikes, and end late fees if you can prove that you paid at least seven days before the due date. It would also require companies to send you your bill at least 25 days before it’s due, as opposed to the current 14 day rule.
Advocates are expecting a full vote in the House in September, and hopefully action from the Senate in 2009. The Fed’s final rule probably won’t appear until next year either. So while this doesn’t mean immediate relief for consumers, change is definitely in the air.
For a full and fun accounting of the bill’s passage, check out Ed’s blog.
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