US House votes credit card curbs

WASHINGTON, D.C.: The US House of Representatives voted overwhelmingly Thursday to rein in credit-card companies accused of duping and gouging consumers already hurt by the paralyzing global recession.

Spurred by the US public’s anger at banks, lawmakers voted 357-70 for legislation aimed at curbing arbitrary interest rate increases and ensuring cardholders who pay bills on time do not face unfair penalties and fees.

The “Credit Cardholders Bill of Rights” also seeks to shield consumers from misleading small print in card contracts, empower card-holders to set their own credit limits, and require companies to fairly allocate payments.

“This bill will help level the playing field between the credit card issuers and consumers,” said Democratic Representative Carolyn Maloney, the measure’s lead author. “This bill will ban some of the most outrageous abuses.”

The measure targets practices like marketing credit cards to minors and interest rate increases on existing balances, which would be banned, while requiring 45 days notice to raise interest rates on future purchases.

“It bans double cycle billing, where they are changing interest rates on balances that have already been paid. It stops many of the tricks and traps of changing the terms and changing the due dates that trap consumers,” said Maloney.

Foes of the measure warned that some of its tougher provisions— most of which won’t take effect for one year—would lead to drying up available credit at a time when many American need access to it.

The legislative battle now moves to the Senate, where it enjoys considerable backing—in part thanks to President Barack Obama’s support.

“Building on what we have achieved today, I will work with Congress in the weeks to come so that I can sign a credit card reform bill into law that upholds these principles and upholds the interests of the American people,” he said in a statement after the House vote.

“Next week we’ll start on credit cards,” Democratic Senate Majority Leader Harry Reid told reporters. “We’ve going to take on the banks again.”

“We believe that the big vote in the House will create even bigger momentum as we go to the Senate,” said Democratic House Speaker Nancy Pelosi.– AFP