McCaskill Applauds Bill to Reform Credit Card Practices

Press Release

Amid this economic crisis, more and more Americans are relying on credit cards to get through tough times, and finding themselves victim to unexplained increases in interest rates and fees. Today, U.S. Senator Claire McCaskill urged her colleagues to pass a bill she co-sponsored in the Senate to prevent credit card companies from taking advantage of cash-strapped consumers with abusive and predatory lending practices. The bill is expected to pass the Senate on Thursday and similar legislation passed the House of Representatives recently.

"When times are tough, getting squeezed by credit card companies makes things even worse for Missouri families," McCaskill said. "For too long, I've heard story after story about these companies jacking up interest rates on cardholders in good standing or targeting seniors and college students with deals they can't afford. I'm pleased to see Congress finally doing something to protect the public from the worst abuses in this industry."

Recently, McCaskill praised President Obama for speaking out on the importance of passing these credit card industry reforms following a meeting he held with top executives from 14 credit card companies. She has been an advocate for better practices in the credit card industry since she arrived in the Senate, introducing credit card reform legislation with Senator Carl Levin (D-MI) in May of 2007. She also co-sponsored a provision to protect college students from credit card marketing ploys with Senator Herb Kohl (D-WI).

Specifically, the Credit Card Accountability, Responsibility and Disclosure Act of 2009 would:

Protect consumers from arbitrary interest rate, fee and finance charge increases and prohibit universal default on existing balances

Require fairness in application and timing of card payments, such as applying payments to the balance with the highest interest rate first

Protect the rights of financially responsible credit card users by prohibiting interest charges on debt paid on time

Provide enhanced disclosure of card terms and conditions and strengthen oversight of credit card industry practices

Ensure adequate safeguards for young people targeted by credit card companies

Require tougher penalties for companies that violate the Truth in Lending Act

Protect recipients of gift cards by requiring all gift cards have at least a five-year life span, and eliminate the practice of declining values and hidden fees for cards not used within a reasonable period of time

Encourage transparency in credit card pricing by requiring a Government Accountability Office (GAO) study on the impact of interchange fees on consumers and merchants

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