House Looks to Speed Up New Credit Card RulesNovember 4, 2009 - by Donny Shaw
Congress messed up a bit when they approved their credit card reform bill back in May by giving credit card companies too much time before the bill’s new consumer protections take effect. They thought it was only fair to give the companies some time to adjust and prepare for the new regulations, so they gave them 9 months. But instead of playing fairly, the companies have been taking this time to jack up interest rates as much as they can before the new regulations take effect, banning arbitrary rate hikes.
Today, the House of Representatives is scheduled to vote on taking away the 9-month grace period. The Expedited CARD Reform for Consumers Act of 2009 they are voting on today would move implementation of the reforms up to December 1, 2009 (soon!). Congress Matters has posted the full list of the provisions that would be bumped up by the bill. You can see all the amendments to the bill that will be voted on by the House at the Rules Committee website.
It’s expected to pass, mostly with Democratic support, but it will also have to go through the Senate before it can become law. The Senate is generally a bit more bank-friendly than the more populist House, so passage there could be more difficult. Sen. Mark Udall [D, CO] introduced a version of the bill in the Senate on October 21st. So far, it has attracted 11 co-sponsors; all of them Democrats.
UPDATE: The bill has been approved, 391-92. The only Democrat who voted against the bill was Rep. Stephanie Herseth Sandlin [D, SD-0], who also voted against the original credit card bill. Federal law allows banks to ignore states’ individual usury laws and follow only the law of the state they are officially chartered in, and South Dakota has the most lax usury law in the country. Not surprisingly, a lot of the big credit card companies are chartered there.