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 The United States House of Representatives on Tuesday, Sept. 23rd., overwhelmingly passed legislation to curb abuses and unfair practices in the credit-card industry. By a landslide vote of 312-112, The Credit Cardholders Bill of Rights Act soared through the House amid a new political climate of increased regulation and oversight of the credit and finance industry. However, the legislation faces an unclear future in the Senate, where members are focused on crafting and passing the huge financial bailout of Wall Street. The White House is seeking quick passage of the Wall Street rescue before Congress adjourns on Friday, which would make action on the credit-card legislation unlikely in the near future. Travis Plunkett, legislative director of the Consumer Federation of America, has said that he hasn’t given up hope, however. “We urge the Senate to include credit-card reform as part of legislation it passes to rescue banking firms,” Plunkett said carefully. “Cash-strapped consumers shouldn’t continue to be gouged by excessive credit-card rates and fees by many of the same financial institutions that will benefit from the bailout.” The Credit Card Bill of Rights, co-sponsored by Democratic Reps. Carolyn Maloney of New York and Barney Frank of Massachusetts, would curtail certain practices such as upfront fees on subprime credit cards; interest-rate increases on existing card balances; steering payments to card balances with lower interest rates and charging late fees on payments mailed at least a week before the due date. Maloney attributed the bill’s passage as a much-needed response to consumer suffering in the troubled economy, with bank's stiffing customers any way possible. “Amidst the financial turmoil on Wall Street, today the House took steps to help those on Main Street. This historic legislation will help working families who face their own credit crunch as a result of what the Federal Reserve itself calls ‘unfair,’ ‘deceptive’ and ‘anti-competitive’ credit-card practices,” Maloney said Sept. 23rd. The legislation is eerily similar to many of the recommendations that the Federal Reserve has suggested to clean up abusive practices in the credit-card industry. Those proposals, which have sparked a record number of public comments, are expected to be finalized sometime in December. U.S. House Republicans have cited the pending regulatory actions as a main reason for opposing the legislation. In a statement, the White House said the bill would also make credit more expensive for some borrowers and harder to get for others because it would hamper card issuers’ ability to set prices based on borrower risk, meaning high-risk people may be hurt by the bill. Some of the largest credit-card companies expressed similar concerns. “We are very concerned that this bill would significantly hinder our ability to price the risks of lending and would result in less credit being made available to creditworthy borrowers at the worst possible time, with generally higher prices for those who do receive credit,” said Betty Reiss, a spokeswoman for credit-card company Bank of America. Stephanie Jacobson, first vice president for public affairs at Chase Card Services, said she too was "disappointed in the vote." “In today’s turbulent economic times, consumers deserve a careful and balanced approach when considering potential changes to consumer credit and the credit-card industry. Consumers have benefited from a competitive marketplace that allows for pricing based upon risk,” Jacobson said, urgently. It appears that some people feel this bill will help consumers not get hidden fees and garbage interest rates, while others feel this is a step towards socialism. They feel this bill will hinder the market place to the point where many people and businesses are unable to get loans at all, since the interest rate the bank would want for them is too high and therefore not legal, so the bank may deny many people and businesses credit cards altogether. Published: Wednesday 24th of September 2008 04:04:54 PM For more information on credit cards and related topics, please see our library of articles. 
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