While I am pretty disgusted with Congressional Democrats right now, I have to give credit where it is due. The House passed the Credit Card Reform Bill today and it will be sent to Obama’s desk and signed into law. The bill isn’t all it could be, but it’s solid piece of progressive legislation.
The landmark credit card legislation will force the $960 billion card industry to reinvent itself and consumers to rethink the way they use plastic.
The bill will prohibit card companies from raising interest rates on existing balances unless the borrower is at least 60 days late. If the cardholder pays on time for the following six months, the company would have to restore the original rate. On cards with more than one interest rate, issuers will have to apply payments first to the debts with the highest rates, which would help borrowers pay off their cards more quickly.
Treasury Secretary Timothy F. Geithner on Tuesday said the bill “will help create a more fair, transparent and simple consumer credit market.”
…The bill would also restrict the ability of college students to get credit cards and require card companies to make contracts easier to understand and available online.
It would also codify changes already made by the Federal Reserve. In December, the Fed banned certain unfair and deceptive practices. But those do not go into effect until July 2010.
The legislation passed today, which goes farther than the Fed’s new rules, would become effective nine months after signing.
You can get a better sense for the provisions in the bill here.
