Credit Cardholders' Bill of Rights passes House

On Thursday, the Credit Cardholders’ Bill of Rights Act of 2009 (H.R. 627) which I Chairman Barney Frank (D-NY), and Subcommittee Chairwoman Carolyn B. Maloney (D-NY) cosponsored, passed the House of Representatives by a vote of 357-70. This comprehensive credit card reform legislation is aimed at leveling the playing field between credit card companies and consumers and abolishes industry abuses that are unfair, deceptive and anti-competitive.

I was sorry to see this important legislation die in the Senate last year and proud that it is one of the first pieces of legislation passed in this new Congress. In this economy, when far too many are relying on their credit cards for survival, we cannot tolerate abusive and unfair practices that exploit these difficult times.

First came the housing crisis, then the crisis in the financial institutions. The next shoe to drop is the credit card crisis. Yesterday’s action helps give teeth to the meeting the President held last week with the major Credit Card companies at the White House. Specifically, the bill protects cardholders against arbitrary interest rate increases, empowers them to set limits on their credit and requires card companies to fairly credit and allocate payments. It also prohibits charging fees just to pay a bill by phone, charging over-the-limit fees unless a consumer opts-in in advance or issuing credit cards to minors.

It is issuing credit cards to minors I have been particularly concerned about. The average college student has more than $3,000 in credit card debt on four or more credit cards. It is a horrible way to begin adult life and has contributed to the average age of bankruptcy continuing to get younger. I am pleased this bill tries to safeguard our young people.