corporateabuse.net

The victories just keep pouring in. Rep. Carolyn B. Maloney (D-NY) the sponsor behind H.R. 627, has got her bill through the sub-committe which provides the U.S. consumer one more tool towards protection from greedy credit card companies that have been running rampant with abuse for so long. The “Credit Cardholders’ Bill of Rights,” provides crucial protections against unfair, but unfortunately common, credit card practices.

Here is the summary of this bill, and what it will do for the consumer.

Ends Unfair, Arbitrary Interest Rate Increases.
• Prevents card companies from unfairly increasing interest rates on existing card balances -
retroactive increases are permitted only if a cardholder is more than 30 days late, if a preagreed
promotional rate expires, or if the rate adjusts as part of a variable rate.
• Requires card companies to give 45 days notice of all interest rate increases so consumers can
pay off their balances and shop for a better deal.
Lets Consumers Set Hard Credit Limits, Stops Excessive “Over-the-Limit” Fees.
• Requires companies to let consumers set their own fixed credit limit.
• Prevents companies from charging “over-the-limit” fees when a cardholder has set a limit, or
when a preauthorized credit “hold” pushes a consumer over their limit.
• Limits (to 3) the number of over-the-limit fees companies can charge for the same transaction
- some issuers now charge virtually unlimited fees for a single limit violation.
Ends Unfair Penalties for Cardholders Who Pay on Time.
• Ends unfair “double cycle” billing - card companies couldn’t charge interest on debt
consumers have already paid on time.
• If a cardholder pays on time and in full, the bill prevents card companies from piling
additional fees on balances consisting solely of left-over interest.
Requires Fair Allocation of Consumer Payments.
• Many companies credit payments to a cardholder’s lowest interest rate balances first, making
it impossible for the consumer to pay off high-rate debt. The bill bans this practice, generally
requiring payments to be allocated proportionally to balances that have different rates.
Protects Cardholders from Due Date Gimmicks.
• Among other measures, requires card companies to mail billing statements 25 calendar days
before the due date (up from the current 14 days), and to credit as “on time” payments made
before 5 p.m. local time on the due date.
Prevents Companies from Using Misleading Terms and Damaging Consumers’ Credit
Ratings.
• Establishes standard definitions of terms like “fixed rate” and “prime rate” so companies
can’t mislead or deceive consumers in marketing and advertising.
• Gives consumers who are pre-approved for a card the right to reject that card prior to
activation without negatively affecting their credit scores.
Protects Vulnerable Consumers From High-Fee Subprime Credit Cards.
• Prohibits issuers of subprime cards (where total yearly fixed fees exceed 25 percent of the
credit limit) from charging those fees to the card itself. These cards are generally targeted to
low-income consumers with weak credit histories.
Bars Issuing Credit Cards to Vulnerable Minors
• Prohibits card companies from knowingly issuing cards to individuals under 18 who are not
emancipated minors.
Swift Implementation of Provisions
• Legislation would be implemented 3 months following the President signing the legislation
into law.

This bill is currently tied to S.235 which is the senates version.

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