"responsible" consumers, Rep. Joseph Kennedy plans to introduce legislation that would prohibit annual fees for customers who regularly pay off balances. GE Capital Services' recent decision to charge a $25 annual fee on customers who avoid interest charges demonstrates the need to reign in issuers, the Massachusetts Democrat said. "Credit card companies pursue a number of policies that entice consumers to get into debt and then make it more and more difficult to climb out," he complained in a Sept. 11 letter to fellow lawmakers. Rep. Kennedy's bill, expected to be introduced when Congress reconvenes in January, also would: *Prohibit card companies from imposing higher rates on customers with large debt loads, provided they pay their bills on time. *Allow customers to cancel a card and pay off the balance at the current rate if rates or fees are changed. *Prohibit penalties on customers who exceed their credit limit if the issuer approved the extra charges. *Ban two-cycle billing on outstanding balances. This occurs when banks apply finance charges retroactively to the date of purchase, instead of calculating interest from the end of a grace period. William P. Binzel, lobbyist for MasterCard International, said Rep. Kennedy's bill will do little for consumers. "Legislation that dictates or prohibits certain programs is clearly unneeded," he said. "The competition among card issuers provides customers with a wide variety of choice, pricing options, and benefit programs." Mr. Binzel said GE customers can easily find another no-annual-fee card if they decide the company's rebate programs does not outweigh the new charges. An aide to Rep. Kennedy said seven lawmakers have already agreed to co- sponsor the bill: Barbara Kennelly, D-Conn.; Sam Gejdenson, D-Conn.; Esteban Torres, D-Calif.; John Lewis, D-Ga.; William Lipinski, D-Ill.; Lane Evans, D-Ill.; and Bernie Sanders, Indep.-Vt. No Republicans have signed on yet, but the aide said Democrats will not have to retake Congress for the bill to have a chance. He pointed out that the Republican Congress recently passed new fair credit reporting rules to get Democratic support for regulatory relief legislation.

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