The House overwhelmingly approved a final version of credit card reform legislation 361 to 64 on Wednesday, sending the bill to President Obama, who is expected to sign it soon.
The bill was approved by the Senate on Tuesday by a 90 to 5 vote.
The legislation, primarily authored by Senate Banking Committee Chairman Chris Dodd and Rep. Carolyn Maloney, bans double-cycle billing, clamps down significantly on card companies ability to increase interest rates and charge over-the-limit fees, and gives consumers more time to pay their bills.
The legislation limits card companies' ability to raise rates on existing balances, by only allowing exceptions in four circumstances: when cardholders pay 60 days or more late, a promotional rate expires, the rate is tied to a variable rate or when the cardholder has entered a workout agreement.
The most immediate change is a requirement in the bill that goes into effect 90 days after enactment that requires card issuers to give customers 45 days notice before increasing rates, allowing consumers time to close the account and pay off balances at the current rate.
The legislation would require consumers to opt in for over-the-limit fee protection and limit the number of over-the-limit fees card issuers could charge for a single event of exceeding a credit limit.
The bill also adds a slew of disclosures designed to caution cardholders about the consequences of making only minimum payments by highlighting how long it would take to pay off balances and showing how much interest would get tacked on.
The bill also requires promotional rates to be in place for at least six months and requires payments to apply to highest rate balances first.
The legislation requires banks to consider borrowers ability to repay, and adds additional protections for borrowers under 21.
The standards would go into effect nine months after enactment, exceeding and surpassing regulations from the Federal Reserve Board and other regulators due to go into effect mid 2010.