Bill Would Bar Penalizing Those Who Pay Off Card Balances

Credit card issuers would be barred from penalizing customers who pay off their balances monthly under a bill introduced Thursday by Rep. Joseph P. Kennedy 2d.

"Nothing could be more bizarre than punishing people for paying on time," the Massachusetts Democrat said at a press conference. "These are company policies that actually hurt consumers if they pay their bills."

Rep. Kennedy said his Credit Card Consumer Protection Act also would:

Allow a customer to cancel a card and pay off the balance at the existing rate if an issuer raises fees or interest rates.

Prohibit penalizing customers for a transaction that exceeds a credit limit if the purchase was approved in advance by the card company.

Require "clear and conspicuous" disclosure of the permanent interest rate when an issuer offers a low introductory rate.

Lamar Smith, Visa USA's senior vice president for government relations, said the measure has little chance of passage.

"I would be very surprised if the House Banking Committee were to act on this bill," he said.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER