May 19, 2009 06:57 PM UTC

Card Reform Bill Nears Senate Passage

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• by: Colorado Pols

Finally some decent print coverage, as the Denver Business Journal reports:

The U.S. Senate was expected to vote Tuesday to pass a measure tightening rules on credit card rate hikes and practices — legislation that U.S. Sen. Mark Udall of Colorado has pushed since his days in the House.

Udall, D-Colo., drafted a credit card reform bill in 2005 as a House member. A version of that bill passed the House by a 357-70 vote April 30.

“I have heard story after story of Coloradans who kept low balances and paid their bills on time, yet still had their rates dramatically increased with no warning,” Udall said last month as the House bill was approaching a vote. “People are being treated unfairly by big banks — some of which are even getting taxpayers’ money as part of the bailout. It’s wrong that they’re taking advantage of hard-working customers. And it’s got to stop.”

Colorado’s other U.S. senator, Michael Bennet, also supports the measure.

“As I travelled across the state [recently], I heard from people who are being forced to absorb double-digit rate increases despite having paid all their bills on time,” Bennet, D-Colo., said in April. “It’s time we rein in these abusive practices and create a new set of rules that protect American consumers without impeding the flow of credit to families and small businesses.”

…If a bill close to the current version becomes law, credit card companies would have to take several steps, including posting their credit rules on the Internet and giving cardholders a written statement explaining pending interest-rate hikes 45 days in advance.

…U.S. Rep. Jeb Hensarling, R-Texas, said the legislation would lead to higher interest rates and fees for credit card users who pay their bills on time because it limits the ability of credit card companies to use risk-based pricing.

“This bill will take us back to a previous era, a bygone era where everybody paid higher interest rates, where a third fewer people had access to credit, and we had all of these dreaded annual card fees,” Hensarling said.