Credit Cardholder's Bill of Rights PR Toolkit

Issues in Plain English

The decline of the housing market and the recent economic downturn has resulted in a heightened awareness of the availability of credit to consumers, and the terms with which it is offered. This has led a number of policymakers in D.C. to purse an agenda that could harm the industry and put limits on the availability of credit to consumers.

Harmful legislation will make credit cards more expensive and less accessible for more people – stifling the credit market even further. These unintended consequences could have a lasting and negative impact on consumers, the industry, and the economy in general.

Excessive government involvement in credit card rules could punish those who follow the rules, as sweeping legislation will limit vital fraud and identity theft protections, will likely increase interest rates for all consumers, and negatively impact access and choice for consumers.

Consumers who have worked to build good credit should be able to enjoy the resulting benefits offered by their lenders. There is not one ‘quick fix’ to this very complex situation, and all parties must examine the lasting implications of any proposal, focusing on maintaining fairness, and avoid hasty solutions that negatively impact consumers or cause undue harm to the economy.

Desired outcomes:

Prevent harmful legislation of credit cards to insure fairness, shared responsibility, and protect consumers from unintended consequences that will negatively impact customers, the industry, and the economy in general

Groups/Organizations in agreement with Roundtable position:

American Bankers Association – Card Policy Council
American’s Community Bankers
American Financial Services Association

Groups/Organizations in disagreement with Roundtable position:

Center for Responsible Lending
Consumer Federation of America
Consumer Action
U.S. Public Interest Research Group

About H.R. 5244 – The Credit Cardholders’ Bill of Rights

H.R. 5244 was introduced by Rep. Carolyn Maloney on February 7, 2008 and has 101 cosponsors.

This legislation would prohibit relying on certain types of risk indicators, forcing card companies to increase interest rates for all customers, and high- and low-risk customers would be treated the same. Additionally, the legislation prohibits a credit card company from reducing a credit line if the company determines that a customer has an increased risk of default, and expressly prohibits an interest rate increase without 45 days notice - even if the customer has defrauded other lenders or defaulted on other loans.

110th Congress Legislative outlook:

S. 1176, Credit Card Minimum Payment Warning Act of 2007, introduced by Sen. Daniel Akaka on April 20, 2007.
- Senate companion bill to H.R. 1510 (see below for additional information).
- Referred to the Senate Committee on Banking, Housing, and Urban Affairs.
  The bill has 4 cosponsors.
S. 1395, Stop Unfair Practices in Credit Cards Act of 2007, introduced by Sen. Carl Levin on May 15, 2007.
- Eliminates universal default.
- Referred to the Senate Committee on Banking, Housing, and Urban Affairs.
  The bill has 10 cosponsors.
S. 1925, Student Credit Card Protection Act of 2007, introduced by Sen. Herbert Kohl on August 1, 2007.
- Limits, by a specified formula, the total credit which may be extended by a creditor during any full calendar year to a full time, traditional-aged college student under a college student credit card account, unless a parent, legal guardian, or spouse of the student assumes joint liability for debts incurred.
- Referred to the Senate Committee on Banking, Housing, and Urban Affairs.
  The bill has 5 cosponsors.

H.R. 873, Credit Card Payment Fee Act of 2007, introduced by Rep. Gary Ackerman on February 7, 2007.

Prohibits a creditor, in the case of a credit card account under an open end consumer credit plan, from imposing a fee based on the manner in which payment on the account is made, including a fee for making any such payment by electronic fund transfer.
Referred to the Subcommittee on Financial Institutions and Consumer Credit of the House Financial Services Committee.
The bill has 6 cosponsors.

H.R. 1461, Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2007, introduced by Rep. Mark Udall on March 9, 2007.

Requires advance notice of any increase in the annual percentage rate (APR) of interest pertaining to a credit card account under an open end consumer credit plan, and imposes a freeze on interest rate terms and fees on canceled cards.
- Referred to the House Committee on Financial Services.
  The bill has 40 cosponsors.

H.R. 1510, Credit Card Repayment Act of 2007, introduced by Rep. David Price on March 13, 2007.

Includes among the mandatory disclosures at each billing cycle of open end consumer credit plans: (1) the words "Minimum Payment Warning: Making only the minimum payment will increase the amount of interest that you pay and the time it will take to repay your outstanding balance;" (2) the number of years and months it would take the consumer to pay the entire amount of the balance if the consumer pays only the required minimum monthly payments; (3) the total cost to the consumer, as well as a breakdown in principal and interest payments, of paying that balance in full if the consumer pays only the required minimum monthly payments, and if no further advances are made; (4) the monthly payment amount that would be required to eliminate the outstanding balance in 36 months if no further advances are made; and (5) a toll-free telephone number for information about accessing credit counseling and debt management services.
Referred to the House Committee on Financial Services.
The bill has 15 cosponsors.

H.R. 2146, Universal Default Prohibition Act of 2007, introduced by Rep. Keith Ellison on May 3, 2007.

House companion bill to S. 1309 (see above for additional information).
Referred to the House Committee on Financial Services.
The bill has 28 cosponsors.

H.R. 3347, Student Credit Card Protection Act of 2007, introduced by Rep. Louise McIntosh Slaughter on August 2, 2007.

House companion bill to S. 1925 (see above for additional information).
Referred to House subcommittee on Financial Institutions and Consumer Credit.
The bill has 8 cosponsors.