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Senate Moves Toward Vote on Credit Card Regulations

The Senate is moving at this hour toward a vote on new restrictions on credit card issuers designed to regulate what the companies can charge consumers.

The so-called "credit card bill of rights," as sponsored by banking committee chairman Sen. Chris Dodd (D-Conn.) would force credit card companies to first apply customer payments to the parts of their bills bearing the highest interest.

It would also force companies to notify card holders of interest rate increases 45 days in advance of their implementation. It would prevent companies from retroactively raising interest rates unless a customer's bill was more than 60 days past due. And it would prevent a card issuer from raising rates on a customer if that customer was behind on payments to another lender.

The Senate did step in and block an amendment by self-described socialist Sen. Bernie Sanders (I-Vt.) that would have capped the interest rate card issuers can charge at 15 percent.

The Senate is expected to pass the bill. The House has already passed its version of the bill, and the two will be reconciled in committee before being sent to President Obama, who has called for restrictions on credit card companies.

-- Frank Ahrens
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By Frank Ahrens  |  May 19, 2009; 11:49 AM ET
Categories:  The Ticker  | Tags: Chris Dodd, Obama, credit cards  
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Comments

We're locking the barn door after the bull has bolted, but better late than never.

Posted by: meand2 | May 19, 2009 12:18 PM | Report abuse

to little,to late as usual. the damage has been done. the loan sharks will find another loophole that their buddies no doubt did not address

Posted by: pofinpa | May 19, 2009 12:56 PM | Report abuse

Issuers who reduce/cancel Line of Credit to improve balance sheet negatively impacts credit report of non-defaulting customers. Reports to credit reporters must clarify LOC adjustment is arbitrary decision to protect lender - not the result of defaulting customer.

Posted by: candacecostello | May 19, 2009 2:23 PM | Report abuse

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