Rep. Keith Ellison, D-Minn., has introduced a bill to prohibit credit card issuers from practicing universal default.
The bill would amend the Truth in Lending Act to bar creditors from using any information other than that directly related to a customer's account to raise the annual percentage rate on a credit card. Use of consumer reports and credit score changes to trigger rate increases would be prohibited.
Credit card companies have been under persistent pressure from the Democratic majority in Congress to back off charges deemed exorbitant, and some large issuers have already scrapped the criticized practices.
Citigroup Inc. said Feb. 28 that it would abandon a universal default policy. JPMorgan Chase & Co. has said it would cancel both over-the-limit fees and double-cycle billing.
A spokesman for Rep. Ellison, a freshman congressman and member of the House Financial Services Committee, said his bill, unveiled Thursday, has 11 co-sponsors.
