Work of Congressman Maffei on Credit Cardholders Bill of Rights is Already Paying Off

Press Release

Work of Congressman Maffei on Credit Cardholders Bill of Rights is Already Paying Off

Today the House Financial Services Committee considered and passed landmark legislation to curb unfair and deceptive credit card lending practices by a vote of 48-19. Representative Dan Maffei's hard work to help keep struggling American families from getting snowed under by credit card debt is paying off. He is proud to be a cosponsor of The Credit Cardholders Bill of Rights (H.R. 627), and expects that Democratic leadership will move swiftly to bring the bill up for a full vote on the House floor.

Congressman Dan Maffei said: "Americans need the protections in this bill. The Credit Cardholders' Bill of Rights will help level the unfair playing field between card companies and cardholders by giving consumers a fair contract. The consumer is at a severe disadvantage in the current system, and the industry defense is always ‘it was in the contract'- well, you shouldn't have to bring a lawyer to review a credit card contract, but the companies have made it too complicated for any normal person to comprehend. I am infuriated every time I hear a story from a constituent who has had their rate triple over night for no reason, but this bill, and my amendment, will end that abusive practice."

The Committee also considered and passed the Maloney-Maffei amendment by a vote of 40-22. The Maloney-Maffei amendment would implement the section of the bill that requires issuers to begin providing a 45-day notice for rate increases to credit cardholders no later than 90 days after the bill is signed into law. If a consumer is going to have his or her interest rate increased, he or she should have the right to know in a timely manner so the consumer has the opportunity to close the account or shop for another card.

BACKGROUND on the Credit Cardholders' Bill of Rights:
In 2007, Rep. Carolyn Maloney (D-NY) convened card issuers, consumer groups and cardholders together in a series of roundtables to identify common-sense reforms that could help relieve the pressures consumers feel over unfair credit card company practices. These reforms were written into The Credit Cardholders' Bill of Rights, (H.R. 5244 in the 110th Congress), introduced in early 2008. Around the same time, federal regulators including the Federal Reserve, Office of Thrift Supervision (OTS), and National Credit Union Administrator (NCUA) began to write rules which paralleled many, but not all, of the Maloney reforms. Those rules, posted for public comment last summer, garnered over 66,000 public comments—the most ever for a financial regulation.

H.R. 627, The Credit Cardholders' Bill of Rights:
Requires card companies to give cardholders advance notice of an interest rate hike
Bans retroactive interest rates increases on existing balances, except where the cardholder is over 30 days late making payment
Stops tricks and traps that make cardholders incur rate hikes and pricey fees
Gives cardholders more control over their credit limits
Prevents card companies from issuing cards to minors

The Credit Cardholders' Bill of Rights already has the support of leading consumer groups, such as Consumers Union, U.S. PIRG, and the Consumer Federation, as well as The National Small Business Association and The Service Employees International Union (SEIU).

"The deck has been stacked in favor of the big banks and the big financial companies and not for the consumers…It's an example of how when the federal government falls down on the job and is listening more to the special interests than it is to ordinary working families that we end up getting into these kinds of crises." -President Obama (01/17/08).

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