| Skelton praises House for approving Credit Cardholders’ Bill of Rights |
By: U.S. Rep. Ike Skelton
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Congressman Ike Skelton
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WASHINGTON, D.C. (May 7, 2009) — Over the years, Fourth District residents have expressed to me their frustration with the confusing fees, interest rate gimmicks, and other issues relating to the credit card industry. In recent weeks, as the economic downturn has continued to take its toll on working Americans, these problems have only grown in magnitude and impact.
As Congress and the nonpartisan Government Accountability Office (GAO) have studied credit card industry practices, it has become clear that the industry has been mistreating its consumers. While I was pleased that the Federal Reserve took action last December to better regulate the credit card industry, it is important for Congress to now make their regulations even stronger by giving them the full force of the federal law.
I was, therefore, very pleased when the House of Representatives recently approved H.R. 627, the Credit Cardholders’ Bill of Rights, by a vote of 357 to 70. This bipartisan legislation includes tough new protections for consumers facing excessive credit card fees, high interest rates, and unfair incomprehensible agreements that credit card companies revise at will.
Specifically, the Credit Cardholders’ Bill of Rights would prevent credit companies from imposing fees on customers who pay their bills on time and would allow customers to set limits on their credit. The bill would require credit card contracts to be written more clearly and in a readable font, and would prevent companies from using misleading terms that, in the end, may damage consumers’ credit ratings. H.R. 627 would also prohibit credit companies from marketing and issuing credit cards to minors under age 18.
The legislation would require credit card companies to show consumers on their bills how much money it would cost them to repay their debt in 12, 24, and 36 month periods, would require card companies to mail billing statements 21 calendar days before the due date — up from 14 days. Also, it would increase the advance notice of rate hikes to 45 days, giving cardholders the information they need to make sound financial decisions.
An item which is important to service members is that the legislation would restrict credit companies from making adverse reports to credit rating agencies when a solider is deployed. This restriction would also apply to service members recovering from service-related injuries.
The Credit Cardholders’ Bill of Rights is a significant step forward in protecting consumer rights. It is an example of how we can learn important lessons from our financial difficulties as a nation. The Senate must now consider H.R. 627 before it can be presented to the President for his signature. I am hopeful that the legislation will receive similar bipartisan support when it is considered by the Senate.
Congressman Ike Skelton (D-Mo.) serves as Chairman of the House Armed Services Committee. Congressman Skelton’s website is at http://www.house.gov/skelton.
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