Senate Passes Credit Card Overhaul
Credit unions avoided a provision that would have regulated interchange fees in a credit card revamp bill that passed the Senate today 90-5.
The House and Senate have to reconcile the differences between their versions and leaders of both chambers have said they hope to get a bill to President Obama by Memorial Day as he as requested.
The bill would expand some of the regulations approved by the Federal Reserve and NCUA scheduled to take effect July 1, 2010. It also maintained an amendment ordering further study of the interchange issue. It contained other provisions that CUNA and NAFCU opposed, including a requirement that a card issuer reassess customers' interest rates every six months if the issuer raises an interest rate; a ban on raising rates if a consumer is more than 30 days late on a bill; a provision mandating that gift cards be valid for at least five years and greater transparency on fees; and the creation of a Financial Products Safety Commission.
The Senate bill also contains provisions from the House bill, including a ban on interest-rate hikes on existing balances and double-cycle billing. Cardholders could avoid a higher rate by canceling the card before it takes effect.
CUNA and NAFCU have expressed support for some of these provisions but say that others would prevent credit unions that issue credit cards from managing risk effectively.