House Passes “Credit Cardholders Bill of Rights”, Senate Approval Less Likely
September 24, 2008 By Justin McHenry
The U.S. House of Representative yesterday overwhelmingly passed a bill dubbed the “Credit Cardholders Bill of Rights” by a vote of 312 to 112, but the chances of it passing in the Senate — especially with the massive loan bailout front and center — is much less likely.
The bill’s intent is to curb credit card company practices that are seen as unfair or deceptive, such as the ability to raise interest rates on existing credit card balances, or to raise rates on very short notice. While consumer groups welcome the bill’s passage, the card companies and the White House argue that it takes away the companies’ ability to price for risk and may have unintended consequences, such as further tightening already shaky credit markets.
In the end, whether the bill ultimately becomes law may not matter much. The Federal Reserve has already proposed a set of regulations similar to those in the bill, and it has the ability to enforce these regulations without Congressional approval. Some form of credit card reform is therefore likely early in 2009, although what its final makeup will be is still in doubt.