The Senate Banking Committee approved a measure 12-11 last Tuesday, and the House Financial Services was set to vote on a similar measure last Thursday at press time.
Both bills would ban interest rate hikes on existing balances, over-the-limit fees and double-cycle billing. The cardholders could avoid the higher rate by canceling the card before it takes effect.
CUNA, NAFCU and other associations representing financial services said the measure would harm the ability of their members to manage risk and thus decrease the availability of credit. Both also said they support the idea of expanding consumer rights but took issue with several parts of the measure, including a provision requiring a 45-day notice of rate changes and the provision mandating creditors set up a system so consumers can notify them if they want to opt out of credit authorization of over-the-limit transactions if fees are involved.
The Senate and House bills are similar to regulations approved by the NCUA and other regulators last year, which take effect next year. Lawmakers want to pass the measure so it takes effect sooner-90 days after the president signs it-in light of the recession.
Senate Banking Committee Chairman Christopher Dodd (D-Conn.), the main sponsor of the measure in that chamber, said that passage is necessary because "we cannot recover if we allow practices to continue that drive so many families into debt."
Because of the closeness of the vote, Dodd promised to work with committee members to make changes before he brings it to the full Senate. During a hearing on the bill last Wednesday, Rep. Carolyn Maloney (D-N.Y.), the measure's main sponsor in the House, said, it "levels the playing field between card companies and cardholders."