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Barack Obama's presidential victory could mean a tougher environment for credit card issuers if certain legislative proposals he endorsed are re-introduced next year with the Democrat-controlled Congress and minus a veto threat. Obama last year introduced the Credit Card Safety Star Act of 2007, which would create a national star rating system to alert customers to which credit cards carry the most risk (CardLine, 11/28/07). And this year Obama endorsed the Credit Cardholders' Bill of Rights, which would prohibit repricing of interest rates on cardholders' outstanding balances, except in certain cases. That bill, which the House passed in September by a decisive margin, did not reach the Senate yet, but is expected to resurface next year (CardLine, 9/23). Obama was also among four senators who last year proposed the Contractor Proper Classification Act of 2007, which would put independent sales organizations that employ contractors under closer scrutiny for paying appropriate taxes and worker benefits (CardLine, 11/29/07). Observers expect that legislation, which did not make further progress in Congress, to be re-introduced next year. Scott Talbott, senior vice president with the Washington, D.C.-based Financial Services Roundtable tells CardLine Obama has talked about capping credit card interest rates at 30%. "Credit card industry reform is one of Obama's platforms and I expect him to focus on it," Talbott says. Duncan Douglas, a partner in the Atlanta-based law firm of Alston & Bird, who focuses on issues related to electronic payment systems, tells CardLine Obama has closely guarded his views on key legislative issues including interchange-rate reform. But he believes Obama's election will make it much easier for Congress next year to push through legislation similar to the Credit Cardholders' Bill of Rights. "Without a veto waiting in the White House and with stronger majorities in the House and Senate, the Democrat-controlled Congress likely will be much bolder in proposing legislation to reform perceived ills in the credit card industry. I expect the reform proposals, under this new regime, to be broader and much faster moving in 2009 than they were in 2008," Douglas says.
