New Hope For The Credit Cardholders Bill Of Rights

You remember the credit card bill of rights, don’t you? This is the legislation that would crack down on the worst of the worst of the credit card industry’s deceptive, anti-consumer practices. The legislative version failed last year, as it faced certain veto by former President Bush (I admit, I like saying that!). Following the bill’s demise, the The Federal Reserve, Office of Thrift Supervision and National Credit Union Administration released a similar set of new rules last December. The rules are great, except for the fact that they gave the credit card companies 18 months, until July of 2010, to get their act together.

More Legislative Action

Sensing outrage from the consumer activists that a woman can produce a baby in half the time that the credit card companies supposedly need to change a couple of rules, Congresswoman Carolyn Maloney, a New York Democrat, has proposed a new bill that makes some key changes. In the Senate, the bill is sponsored by Democratic Senators Chuck Schumer of New York, and Mark Udall of Colorado. Udall was just elected to the Senate here in Colorado, and I am very proud that this appears to be one of his first acts in the Senate.

What Changes?

First and foremost, the changes would take effect a mere 90 days after President Obama (I love that term too!) signs it.

According to Congresswoman Maloney’s press release, her bill contains the following provisions:

� Protects cardholders against arbitrary interest rate increases
� Prevents cardholders who pay on time from being unfairly penalized
� Protects cardholders from due date gimmicks
� Shields cardholders from misleading terms
� Empowers cardholders to set limits on their credit
� Requires card companies to fairly credit and allocate payments
� Prohibits card companies from imposing excessive fees on cardholders
� Prevents card companies from giving subprime credit cards to people who can’t afford them
� Requires Congress to provide better oversight of the credit card industry
� Contains NO rate caps, fee setting, or price controls

“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. This bill levels the playing field between card companies and cardholders while fostering fair competition and free market values. It sets no rate caps, fees, or price controls, nor does it dictate any business models to card companies. There is no doubt that credit card companies provide a valuable service and deserve to earn a fair profit, but consumers deserve the right to be able to understand their accounts and be empowered to control them. This bill would give cardholders the information and rights they deserve to make decisions about their own credit,” said Rep. Maloney.

What Do I Think

I can only praise her effort with the hope that the bill sails through Congress. These rules will take effect eventually, that much is for sure, and I can’t think of a plausible argument against enacting them as soon as possible.

With the new, larger Democratic majority in Congress, not to mention a Democratic President, you would think this bill was a slam dunk. There is only one fly in the ointment that I can see. Our new Vice President, Joe Biden, is from Delaware, by far one of the most banking friendly states. While I generally like Joe, he even graduated from my alma mater, the University of Delaware, I am often in disagreement with him on his positions regarding banking. Joe supported the egregious bankruptcy bill of 2005, and really hasn’t been a friend to consumers when it comes to credit card legislation.

My best hope is that since he no longer needs to worry about reelection from the business comunity in Delaware, his opposition to this bill might not be pronounced. Either that, or he reclaims the role of powerless figurehead that has been the halmark of the Vice Presidency for most of it’s history.

Either way, I hope the Obama administration (another nice phrase) gets behind this pro consumer legislation and gets it done. That would be Change that I can believe in.