In his weekly radio address on Saturday, President Obama called on Congress to take final action to pass a credit card reform bill that protects American consumers that he can sign into law by Memorial Day. This afternoon, the Senate commenced debate on H.R. 627 with substitute language announced today in a deal between Senate Banking Committee Chairman Christopher Dodd (D-CT) and Senator Richard Shelby (R-AL), the Committee’s ranking Republican. Although the deal struck between Dodd and Shelby contains more restrictions than those found in S. 414 (Senator Dodd’s original bill known as the Credit CARD Act) as approved by the Senate Banking Committee on March 31, 2009, the amendment would soften a requirement that would have prohibited credit card companies from increasing interest rates on existing balances, permitting rate increases if a consumer is 60 days late with a payment. Overall, the provisions of the bill are more stringent than those contained in H.R. 627 (the Credit Cardholders Bill of Rights), as approved last week by the House, which, for example, would permit rate increases on existing balances if a consumer is 30 days late with a payment.

Senate debate on H.R. 627 is expected to continue tomorrow.