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The Senate Banking Committee yesterday narrowly approved legislation for sweeping credit card industry reforms, according to American Banker, a CardLine sister publication. The 12-11 vote in favor of the Credit Card Accountability Responsibility and Disclosure Act of 2009, sponsored by Sen. Christopher Dodd, D-Conn., included no Republicans. One Democrat on the committee, Tim Johnson, D-S.D., voted against it. But analysts said it is unlikely the bill will pass a full Senate vote without bipartisan support. Johnson said during the hearing it was a mistake to push the bill before new rules from the Federal Reserve Board and other regulators go in effect next year, and contended that Dodd's bill would do consumers more harm than good. "At a time when Americans are already seeing their credit card interest rates rise and their credit limits decrease, this legislation could mean that even fewer consumers get credit and lines of credit are greatly reduced," Johnson said. Dodd's bill would go further than the card regulations finalized by the Fed, which would define several common practices like double-cycle billing and universal default as unfair or deceptive. The regulators' rules would not go into effect until July 2010, but Dodd's bill would take effect nine months after enactment. Unlike the Fed proposal, Dodd's bill also would ban charging interest on fees, prohibit fees for paying bills and restrict over-the-limit charges. Dodd emphasized after the vote that he was willing to make some concessions on the bill. The House is pushing its own measure. The House Financial Services financial institutions subcommittee is scheduled to vote today on a bill from Rep. Carolyn Maloney, D-N.Y. that would codify the Fed rules and speed up implementation.
