Senators are beginning work on the Credit Cardholders’ Bill of Rights Act (H.R. 627) today. Senate Banking Committee Chairman Chris Dodd (D-CT) and Ranking Member Richard Shelby (R-AL) have agreed on a compromise substitute amendment which would scrap the House-passed bill for a Senate version.
Per the AP, here are some key provisions in the Senate bill:
- would prohibit lenders from increasing interest rates on past buys unless the cardholder has fallen at least 60 days behind
- lenders would be required to review a cardholder’s terms every six months
- would require the Federal Reserve to report to Congress every two years on the cost and availability of credit
- would require that promotional rates last at least six months
- prohibits rate increases in the first year after an account is opened
- requires anyone under 21 to prove that he or she can repay the money before being given a card, or have a parent or guardian promise to pay off the debt if he or she defaults
- requires lenders to give customers 45 days notice before increasing rates and mail their bills 21 days before the balance is due
- bans fees if customers want to pay their bills by phone or online
- prohibits over-the-limit fees unless a cardholder elects to be allowed to go over their limit
- requires lenders to say how much time it would take and how much money in interest would be paid if only the minimum monthly payments are made
- requires that gift cards remain valid for five years
This bill is expected to pass, likely this week. It has full backing from the White House and will be signed into law once any differences with the House are worked out.