Bills, Fed rules on credit cards
A comparison of House and Senate legislative proposals with pending Federal Reserve regulations.
HOUSE BILL
Takes effect a year after enactment, except for requirement of notice before interest rates are increased, which goes into effect in 90 days. The bill:
— Prohibits double-cycle billing and “retroactive” interest rate hikes on previous balances.
— Requires that customers receive 45 days notice before their interest rates are increased.
— Bans the issuance of credit cards to anyone under 18. Sets underwriting standards for credit cards for college students, including limiting credit lines if there is no co-signer, and requiring proof of income and credit history.
— Bans “pay-to-pay” fees, which are charged when someone pays their bill by phone or on the Internet. An exception is made for special speeded processing of payments requested by the card holder, for which fees can be levied.
— Allows individuals to set a credit limit for themselves that cannot be exceeded. If a bank approves a purchase that pushes the consumer above their limit, the bank cannot charge a fee.
—Requires that payments made by card holders that exceed the minimum monthly level are applied first to the portion of the remaining balance with the highest interest rate, and then to any other balances in descending order.
—Requires 30 days notice to consumers before their accounts are closed.
SENATE BILL
Takes effect nine months after enactment.
—Bans double-cycle billing and retroactive rate increases.
—Requires that customers receive 45 days notice before rates are increased.
—Bans the issuance of credit cards to people under 21 unless they show they can repay the debt or complete a certified financial literacy course.
—Bans “pay-to-pay” fees.
—Restricts over-the-limit fees to one each billing cycle.
—Prevents card issuers from changing any terms of a contract so long as the card holder pays on time.
FEDERAL RESERVE REGULATIONS
Take effect in July 2010.
— Require banks to give customers a reasonable time, such as 21 days, to pay their bill before it is considered late.
— Require banks to give customers 45 days notice before raising interest rates on new purchases, even if the customer is late or delinquent in paying their account.
— Prohibit, in most cases, retroactive rate increases.
— Prohibit double-cycle billing.
— Limit excessive fees charged on subprime credit cards, which are marketed to people with bad credit.
Related News
Bank of America sending notices to customers about annual fees on some credit cardsOctober 13th, 2009 BofA to charge annual fees on some credit cardsNEW YORK — Bank of America Corp. said Tuesday it will charge a limited number of its credit card customers annual fees ranging from $29 to $99 starting next year.
Bank of America sending notices of annual fees on some rewards credit cards to customersOctober 13th, 2009 BofA to charge annual fees on rewards credit cardsNEW YORK — Bank of America Corp. is sending notices to a limited number of customers that it will start charging an annual fee for some of its rewards credit cards starting next year.
Fed moves ahead on Congress' plan to better protect Americans from credit card abusesSeptember 30th, 2009 Fed moves ahead on credit card protection planWASHINGTON — The Federal Reserve proposed rules Tuesday to better protect Americans from sudden hikes in interest rates on credit cards. The proposal would generally bar rate increases during the first year after an account is opened.
Defaults on Bank of America credit cards edge higher, delinquencies improve; shares dipAugust 17th, 2009 BofA credit card defaults edge higher in JulyNEW YORK — Bank of America Corp. said Monday that defaults on its credit cards edged higher in July, but delinquencies declined.
Say goodbye to fixed-rate cards; 2 major banks switching terms in months leading up to reformsJuly 10th, 2009 Credit card pain: Some say goodbye to fixed ratesNEW YORK — It could be time to kiss fixed-rate credit cards goodbye. Two of the biggest issuers in the nation — Bank of America and Chase — say they're switching some fixed-rate cards to variable rates to manage costs in light of the sweeping new reforms to the credit card industry.
Say goodbye to fixed-rate cards; 2 major banks switching terms in months leading up to reformsJuly 10th, 2009 Credit card pain: Some say goodbye to fixed ratesNEW YORK — It could be time to kiss fixed-rate credit cards goodbye. Two of the biggest issuers in the nation — Bank of America and Chase — say they're switching some fixed-rate cards to variable rates to manage costs in light of the sweeping new reforms to the credit card industry.
Credit card industry will have to make major adjustments to new laws, Capital One CFO saysJune 3rd, 2009 Capital One CFO: Industry facing dramatic changesNEW YORK — New credit card legislation is expected to have a dramatic impact on the national lending landscape, the chief financial officer of Capital One Financial Corp. said Wednesday.
Obama to continue push to protect consumers from credit card practicesMay 14th, 2009 Obama continues push for credit card billRIO RANCHO, N.M. — President Barack Obama says changing the way credit card companies bill customers is critical to fixing the nation's ailing economy.
Senate defeats bid that would have let homeowners seek foreclosure relief in bankruptcy courtApril 30th, 2009 Senate defeats anti-foreclosure billWASHINGTON — With President Barack Obama on the sidelines, the Senate defeated his promise of a bankruptcy court refuge for hundreds of thousands of families about to lose their homes to foreclosure. The Senate voted 45-51 against the legislation, which would have let debt-ridden homeowners seek mortgage relief in bankruptcy court.
Legislation reining in credit card practices may pass, helped by Obama support, tough economyApril 30th, 2009 Credit card legislation nearing successWASHINGTON — Responding to a wave of populist anger, the House moved toward passage of a consumer protection bill to rein in credit card practices and eliminate sudden interest rate increases and late fees that have entangled millions of consumers. Similar legislation is before the Senate, where prospects also appear promising.
Legislation reining in credit card practices may pass, helped by Obama support, tough economyApril 30th, 2009 Credit card reform legislation nears passageWASHINGTON — Legislation to rein in credit card practices and eliminate sudden rate hikes and late fees that have entangled millions of Americans moved closer to becoming law Thursday, bolstered by presidential pressure and the backdrop of economic calamity. Measures before the House and Senate are designed to enhance protections for credit card customers.
Geithner pushes for credit card reform as House prepares to vote on legislationApril 29th, 2009 Geithner pushes for credit card reformWASHINGTON — The Obama administration is pressing for passage of legislation to rein in credit card practices and eliminate sudden rate increases and late fees that have entangled millions of American consumers. Treasury Secretary Timothy Geithner and Rep.
Obama embraces crackdown on credit-card lending, hosts industry executives at White HouseApril 23rd, 2009 Obama hosting credit-card CEOs, pledges new rulesWASHINGTON — President Barack Obama is pushing to rein in costs for millions of Americans who use credit cards, an appeal to consumers as many struggle to pay their bills. But the banking industry is warning that Obama's push for legislation could backfire, restricting lenders and making less credit available to Americans during the economic crisis.
Obama embraces crackdown on credit-card lending, will host industry executives at White HouseApril 23rd, 2009 Obama to host credit-card CEOs, pledges new rulesWASHINGTON — President Barack Obama, appealing to mainstream consumers, is pushing for more legal protection for the millions of Americans who use credit cards. Obama was meeting with leaders of the credit-card industry Thursday, and he's already backing tougher legislation.
Obama pledges protections and clearer rules for credit-card users, eyes legislationApril 23rd, 2009 Obama pledges protections for credit-card usersWASHINGTON — President Barack Obama said Thursday he is determined to get a credit-card law that eliminates the tricky fine print, sudden rate increases and late fees that give millions of consumers headaches. "I trust that those in the industry who want to act responsibly will engage with us in a constructive fashion, and that we're going to get this done in short order," Obama said, delivering a pointed message to leading executives of credit-card issuing companies after a closed-door White House meeting.
Loading ...