Today, the U.S. House of Representatives approved H.R. 627 the “Credit Cardholders’ Bill of Rights,” by a vote of 357-70, with 252 Democrats and 105 Republicans voting in favor. The bill was considered pursuant to procedural restrictions reflected in H.Res. 379, which limited consideration to a list of 17 amendments. Fifteen of the proposed amendments were approved, including six that were supported by Treasury Secretary Geithner. These include:
- An amendment proposed by the bill's principal sponsor, Representative Carol Maloney (D-NY), that would require consumers to opt-in if they want over-the-limit protection and agree to be charged a corresponding fee;
- An amendment proposed by Representative Luis Guiterrez (D-Ill) that would require credit card companies to apply payments in excess of the minimum payment first to the remaining balance with the highest outstanding APR;
- An amendment by Representative David Price (D-NC) that would require better disclosure regarding the length of time it would take a consumer to pay off an existing balance by only making the minimum payment and what the total interest cost would be;
- An amendment proposed by Rep. Tom Perriello (D- VA) that would require a promotional interest rate to apply for six months before it could be raised;
- An amendment proposed by Rep. Mark Schauer (D- Mich) that would require creditors to post their credit card agreements on their websites, and the Federal Reserve Board to compile and report the agreements on its website; and
- An amendment proposed by Financial Services Committee Chairman Barney Frank (D-MA) that would require the Federal Reserve to review the consumer credit card market and report to Congress every two years.
The House rejected two amendments proposed by Rep. Jeb Hensarling (R-TX), which would have permitted, with certain restrictions, the continuation of retroactive rate increases, universal default, and “double-cycle billing.”
The bill now goes to the Senate, which is already slated next week to consider S. 414, the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (the Credit CARD Act) introduced by Senator Christopher J. Dodd (D-CT), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs. The two bills contain significant differences, so both consumers and the credit card industry have reason to watch how the differences are ultimately resolved.