Capps Applauds Passage Of Credit Cardholders' Bill Of Rights

Today Congresswoman Lois Capps voted for important legislation that would protect consumers and small businesses from predatory practices by credit card companies. This legislation, the Credit Cardholders' Bill of Rights Act (H.R. 627), will finally level the playing field between cardholders and card issuers by implementing smart new protections for consumers facing excessive credit card fees, sky-high interest rates, and unfair, incomprehensible agreements that credit card companies revise at will. The House passed the bill by a bipartisan vote of 357-70.

"This legislation is long overdue," said Capps. "For years credit card companies have taken advantage of consumers and small businesses with confusing credit card agreements and deceptive fee structures. These practices cost consumers billions in excess charges every year and are especially noxious during these troubled times when Americans are hurting. This bill is a pro-consumer, pro-small business piece of legislation that is important to getting our economy back on track."

The Credit Cardholders' Bill of Rights will help consumers better manage their credit by prohibiting predatory billing practices and exposing previously hidden fees. The bill would institute a number of common-sense consumer protections, including:

Preventing card companies from unfairly increasing interest rates on existing card balances, and requiring card companies to give 45 days notice of all interest rate increases or significant contract changes.

Requiring card companies to let consumers set their credit limit as fixed so it cannot be exceeded. This would prevent companies from charging "over-the-limit" fees when a cardholder has set a limit.

Ending unfair penalties for on-time payments by preventing card companies from adding additional fees on balances consisting solely of left-over interest if a cardholder pays on time and in full.

Protecting cardholders from due date gimmicks by requiring card companies to mail billing statements 21 calendar days before the due date, and to credit as "on time" payments made before 5 p.m. local time on the due date.

Helping consumers pay down their credit card debt faster by requiring card companies to apply payments made in excess of the minimum payment to balances subject to the highest interest rate first.

"While American families and small businesses are struggling to make ends meet, credit card companies continue to rake in record profits, all too often through these unfair and deceptive practices," Capps said. "This year alone credit card companies will break all records for late fees, over-limit charges, and other penalties, pulling in more than $20.5 billion. I proudly voted for this bill, and hope the Senate acts quickly to pass it so we can send it to the President for his signature."

The bill is supported by a wide spectrum of organizations that advocate on behalf of consumers, civil rights, businesses and workers, including Consumers' Union, Consumer Federation of America, and U.S. PIRG; NAACP and the National Council of La Raza; the National Federation of Small Businesses and the National Small Business Association; and AFL-CIO and SEIU.

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