CAMPAIGN FOR AMERICA’S FUTURE HAILS CREDIT CARD LEGISLATION AS A STEP IN THE RIGHT DIRECTION

WASHINGTON – The Campaign for America’s Future today applauded the Senate for overwhelmingly passing H.R. 627, the Credit Cardholders’ Bill of Rights Act of 2009 by a vote of 90-5. Sponsored by Senator Chris Dodd (D – Conn.), this bill would amend the Consumer Credit Protection Act to ban abusive credit practices, improve consumer discloses, and require more transparent practices in the credit card industry. The companion bill, H.R. 627, sponsored by Rep. Carolyn Maloney (D – New York), was passed by the House on April 30 by a vote of 357-70.

STATEMENT OF ROBERT BOROSAGE, CO-DIRECTOR, CAMPAIGN FOR AMERICA’S FUTURE

The Credit Cardholders’ Bill of Rights Act of 2009 will restore some much-needed fairness to a credit card industry that is largely out of control. It prevents credit card companies from arbitrarily hiking interest rates, applying newly-increased interest rates to prior existing balances; imposing major penalties for minor transgressions; imposing late fees even when it is proven that payment was mailed on time; imposing finance charges on balances repaid on time; and marketing and issuing cards to young people who are clearly unable to repay debt.

For far too long, credit card companies have exploited their own customers with misleading information and usurious interest rates. Usury laws are designed to set fair and reasonable limits to the interest rates credit cards can charge customers. But beginning in the 1980s, conservatives began chipping away at these laws, and widespread deregulation has left customers vulnerable to unscrupulous credit card companies.

But while this measure is a strong first step toward restoring basic fairness and transparency in credit card industry practices, we urge Congress to continue this work. For example, this legislation fails to place a cap on interest rates, which is vital to protecting consumers. In this unstable economy, we urge Congress to enact additional legislation aimed at protecting the average American from unscrupulous lenders.