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Many lawmakers issued statements trumpeting a victory with the Cardholders' Bill of Rights, which passed yesterday in the U.S. House of Representatives (CardLine, 9/23). The vote generally went along party lines, with 228 Democrats and 84 Republicans supporting it. Those who voted against the bill included 111 Republicans and one Democrat, Stephanie Herseth Sandlin, D-S.D. South Dakota is the base for several credit card operations centers employing thousands of workers for Citigroup Inc.'s Citibank, HSBC Corp. and Wells Fargo & Co. The most contentious provision of the bill is a clause prohibiting card issuers from raising cardholders' interest rates on existing balances except when a payment is received at least 30 days late or when a promotional rate expires. The bill is not expected to reach the Senate during this session but some lawmakers see its passage as a positive sign for the revival next year of other legislation aimed at reforming credit card industry practices. "This bill is the beginning of important reforms in credit cards – the beginning of increased protection for consumers of credit card companies," said Pete Welch, D-Vt., in a statement released yesterday in conjunction with the Merchants Payments Coalition. Welch said "the other side of the coin" is legislation introduced earlier this year to regulate interchange fees paid by merchants on debit and credit cards. Welch in June introduced the Credit Card Interchange Fees Act, which would abolish the honor-all-cards rule and enable merchants to steer customers away from using higher-cost forms of payment, such as rewards-based credit and debit cards (CardLine, 6/17). Welch's interchange bill supplements the Credit Card Fair Fee Act, also introduced this year, which would force card networks to negotiate new interchange fees with retailers (CardLine, 3/7).
