A late Monday compromise on the U.S. Senate Banking Committee between Sens. Richard Dodd (D-Conn) and Richard Shelby (R-Ala) has paved the way for a Senate approval of new consumer-friendly restrictions on credit-card practices, moving it into the reconciliation phase and one step closer to enactment.
According to American Banker, the compromise involved almost no concessions to the hard-line changes sought by the Obama administration in advance of next year’s federal regulations restricting card companies on raising rates and fees on cardholders’ existing balances. Analysts say the GOP caved because of the “unstoppable” momentum the card bill had gained.
That freight train was fueled only two days prior as President Barack Obama made the issue the centerpiece of his Saturday morning weekly address. Giving Americans a nod for knowing they have to live within their means, Obama said cardholders “have a right to not get ripped off by the sudden rate hikes, unfair penalties, and hidden fees that have become all-too common in our credit card industry.” In strong-arming the Senate, Obama was burgeoning Treasury Secretary Timothy Geithner’s earlier strong endorsement of a cardholders’ “bill of rights.”
The president, in his address, made it known he wants immediate action. “It is past time for rules that are fair and transparent,” he continued as he launched into a “new set of principles” that sounded an awful lot like a summary of the Fed rules set for introduction in July 2010, such as “plain language in plain sight” and stronger “monitoring, enforcement, and penalties” against companies that fail to comply.
Obama praised the recently passed House bill, and urged the Senate on in its deliberations this week. The president is calling for final Congressional action so he can sign it by Memorial Day, although he didn’t specify whether he meant the “as observed May 25” Memorial or the traditional May 30th version. The credit card issue will be the headline topic of a town hall meeting this week.