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The U.S. House of Representatives today passed the Credit Cardholders' Bill of Rights by a vote of 312 to 112, with most members voting along party lines after a one-hour debate. Rep. Carolyn Maloney, D.-N.Y., who introduced the bill (CardLine, 2/7), urged passage despite objections from several Republicans. Opponents said Congress should not interfere with the credit card industry when new federal regulations are pending that would rein in credit card practices many lawmakers deem abusive. Rep. John Campbell, R-Calif., said he opposed the bill because the credit markets are "already in great turmoil," and the bill could wreak further havoc on an already fragile system. Maloney said credit card issuer and industry-group arguments that the bill would raise the cost of credit and restrict consumers' access to credit "have no basis in fact." During six hearings on the bill this year, industry representatives failed to demonstrate how the bill's passage would restrict access to credit, she said. The American Bankers Association said in a statement it is disappointed with the bill's passage, adding: "While well-intentioned, [the bill] will increase the cost of credit for consumers and small businesses across the country, result in less access to credit for consumers and businesses alike, and may further roil the securities markets-all at a time when our economy can least afford it." The bill prohibits card issuers from changing interest rates on existing card balances except when payments are at least 30 days late. It also requires issuers to apply payments to balances with the highest interest rates first, and it extends the bill-payment cycle to 25 days from the current minimum of 14 days (CardLine, 8/1). A similar version of the bill is pending debate in the Senate Banking Committee. Separately, the Federal Reserve plans to finish its own rules for card issuers, which closely parallel key provisions of Maloney's bill, before the end of the year (CardLine, 9/10).
