On March 31, 2009, Senator Christopher J. Dodd (D-CT), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, announced that the Committee had reported out S. 414, the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (the Credit CARD Act). This legislation, authored by Senator Dodd and initially introduced in 2004, would provide "tough new protections for consumers who are treated unfairly by their credit card companies."
The bill passed the Committee by a 12-11 vote, in spite of a letter sent to the Committee from the American Bankers Association and nine other large industry groups arguing that the bill would lead to a tightening of credit and higher prices that would ultimately hurt consumers and small businesses. The Credit CARD Act, however, is strongly backed by consumer groups such as the Consumer Federation of America and Consumers Union.
As briefly outlined by the Committee, the Credit CARD Act will "help protect American consumers by bringing an end to wrongful credit card practices" by, including provisions that:
- Protect consumers from “any time, any reason” interest rate increases and account changes;
- Prohibit unfair application of card payments;
- Protect cardholders who pay on time;
- Limit abusive fees and penalties;
- Prohibit issuers from using a consumer’s card history with another creditor to raise interest rates (“universal default” ban);
- Prohibit issuers from charging interest on debt that has already been repaid;
- Ensure that cardholders are informed of the terms of their account; and
- Protect young consumers from aggressive credit card solicitations.
It is not clear when the bill might be considered on the Senate floor.