Tuesday, September 23, 2008
to Curb Abusive Lending Practices
as Part of Any Wall Street Bailout Package
WASHINGTON, D.C. – By a vote of 312 to 112, the U.S. House of Representatives voted today to pass HR 5244, the Credit Cardholders Bill of Rights. The bill would curb a number of predatory credit card lending practices that can unfairly trap consumers in debt. In light of the overwhelming vote in the House, Consumers Union called on the Senate to include the reforms as part of any Wall Street bailout package.
“Millions of Americans are drowning in debt because of unfair and deceptive credit card lending practices,” said Pamela Banks of Consumers Union. “This bill restores some basic fairness to the market and will help ensure that consumers will be able to better manage their finances in these tough economic times. As Congress shapes a bailout of the financial sector, it should include these credit card protections so consumers won’t continue to be gouged by these unfair lending practices.”
HR 5244, sponsored by Representative Carolyn Maloney, requires credit card companies to stop:
Applying unfair interest rate hikes retroactively to balances incurred under the old rate;
Assessing hidden and unjustified interest charges on balances already paid off;
Piling on the debt that consumers owe by requiring them to pay off balances with lower interest rates before those with higher rates;
Charging late fees even though consumers mail their payments seven days in advance of the due date; and
Charging excessive upfront fees to subprime cards targeted at consumers with blemished credit histories.
In a letter sent to Members of Congress today, Consumers Union urged lawmakers to include the credit card reforms in any Wall Street bailout package along with a number of other reforms to protect the interests of consumers and taxpayers.
Pamela Banks – 202-462-6262