News and Tribune

Clark County

December 19, 2009

Hill wants swift enactment on credit card law

Law delayed for companies to improve technology

The U.S. House overwhelmingly passed H.R. 3639, but a bill that would speed-up restrictions on credit card companies has yet to be measured by the Senate.

Both wings of Congress passed H.R. 627 — the Credit Cardholders’ Bill of Rights — this spring. The legislation is intended to check interest rates and credit card fees.

Additionally, the bill calls for an increase in the date of notice period credit provided card companies have to provide to customers before raising rates.

The legislation is based in part on a 2008 Federal Reserve Board study that suggested prohibiting credit card companies from raising rates on preexisting balances, billing twice in a cycle to increase interest or charging late fees if the consumer has not been given a reasonable amount of time to pay.

But enactment of the legislation has been delayed in order to give credit card companies time to revamp software to handle the changes.

But H.R. 3639 calls for the immediate implementation of the new law, as some legislators are accusing credit card companies of deepening their pockets to circumvent the legislation before it goes into effect.

Katie Moreau, spokesman for Rep. Baron Hill, said she fields more calls on credit card reform than just about any other topic.

The Indiana Democrat voted in favor of stiffening credit card regulations and the subsequent legislation to speed up enactment of the laws. Earlier this month, Hill asked for an amendment that would outlaw minimum monthly payment increases that change the terms of a cardholder’s agreement if the customer has paid their bill on time.

But the amendment was ruled not in order and thus, wasn’t heard by the House.

In an end of the year briefing to his constituents, Hill addressed his holdup with some credit card companies.

“I have heard from hundreds of 9th District residents who have had their credit card terms changed unexpectedly, their minimum monthly fees increased out of the blue, and have experienced their credit card company engaging in disingenuous tactics,” Hill wrote.

Opponents of H.R. 627, including Rep. Spencer Bachus, the ranking Republican on the Committee on Financial Services, believe the legislation could limit the availability and raise the price of credit.

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