WASHINGTON, Sept. 23 -- Rep. Brian N. Baird, D-Wash. (3rd CD), issued the following press release:
With the country in the midst of a credit crisis, Congressman Brian Baird (D-WA-03) has stepped up to aid millions of Americans held hostage by the unfair practices of credit card companies. Today, Congressman Baird joined a bipartisan majority in passing the Credit Card Holders' Bill of Rights (H.R. 5244); Baird was also a co-sponsor of the bill. When signed into law, the Credit Card Holders' Bill of Rights will once and for all put a stop to unfair, arbitrary rate increases, penalties for people who pay on time, and misleading practices that cost the American consumer billions of dollars a year.
"For far too long, credit card companies have been preying on people's misery, sticking them with fees and interest rates that make paying off a balance almost impossible," said Congressman Baird. "By passing the Credit Card Holders' Bill of Rights, we've taken an important step to ensure that everyone gets a fair shake while trying to pay off their debts."
Credit-card debt in the U.S. has reached a record high - at almost $1 trillion. The average American household's debt from credit cards has risen from $2,966 in 1990 to $9,840 in 2007. Meanwhile the credit card industry is awash in money. In 2007, credit-card issuers imposed $18.1 billion in penalty fees on families carrying credit card balances. That's up more than 50% since 2003 and it accounts for almost half of the $40.7 billion in industry profits. This year, card companies will break all records for late fees, over-limit charges, and other penalties, pulling in more than $19 billion.
"In the past few years, we've seen a troubling pattern: corporate America collects staggering profits, and the middle class suffers," said Congressman Baird. "As Congress begins to consider legislation that will bail Wall Street out of the mess it created, the Credit Card Holders' Bill of Rights takes an important step towards looking out for Main Street as well."
The bill puts into law a number of regulations also proposed by the Federal Reserve Board earlier this year. When signed into law, the Credit Card Holders' Bill of Rights will:
* End unfair, arbitrary interest rate increases, by requiring reasonable notice before rate hikes and permitting lenders to raise rates on existing balances only if minimum payments are more than 30 days late (except for increases caused by changes in stated variable and introductory offers).
* End penalties on cardholders who pay on time, like charging interest on already repaid debt.
* Protect consumers from due date gimmicks by requiring credit card companies to mail bills 25 days (instead of 14) before the due date.
* End the credit card practice of applying consumer payments to lower interest debt first.
The Credit Card Holders' Bill of Rights has received wide support from a variety of public interest organizations including: Consumer Federation of America, Center for Responsible Lending, Leadership Conference on Civil Rights, Public Citizen, U.S. PIRG, AFL-CIO, SEIU, American Federation of Teachers, and the UAW.
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