Consumer Payment Card News

Cardholder Rights

President Obama is set to sign the “Credit Cardholders’ Bill of Rights Act of 2009” into law by Memorial Day. Congress yesterday passed the new legislation that bans the many gotchas buried in the fine print of credit card agreements. The U.S. House voted 361 to 64 to send Obama the stronger Senate version of the legislation. The U.S. Senate voted 90 to 5 on Tuesday to pass “H.R. 627.” Once Obama signs the bill, it will take nine months to go into effect. Speaker Nancy Pelosi said the “Credit Cardholders’ Bill of Rights” is historic legislation that protects American consumers against sky-high interest rates, excessive
fees and other unfair practices of some credit card companies. The American Bankers Association said the while the legislation is tough, but workable, it also unfortunately contains some provisions that will undermine the availability of credit. The ABA says it is concerned that the Senate bill will have a dramatic impact on the ability of consumers, students, and small businesses to obtain and use credit cards. U.S. Senator Mary Landrieu (D-LA) says that unfortunately, the “Credit CARD Act” does not apply protections to small business owners who have fallen victim to predatory credit card practices. But, the Center for Responsible Lending said “H.R. 627” includes provisions that would go a long way toward restoring fairness and responsibility to the credit card market. DNC Chairman Tim Kaine said the legislation stops unfair practices that for too long have preyed on American credit card holders while requiring fairness and transparency. However, the California-based Consumer Education Foundation noted that the legislation will not protect consumers against outrageous interest rates or other egregious practices and represents an astounding victory for the banking and credit card industry. The CEF says that under the Senate bill: There is no cap on credit card interest rates; companies can raise interest rates on future purchases at any time; issuers can unilaterally changes the terms of the credit card contract; and can still use fine print “arbitration” clauses to prevent consumers from suing them in court. For more details on the new credit card rules visit CardTrak News for May 20, 2009.

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