Congress Passes Credit Card Overhaul
Credit unions and other credit card issuers will have tighter restrictions on their ability to raise interest rates and the requirements for sending out bills as a result of a bill approved by the House today in a 361-64 vote.
This follows a 90-5 vote in the Senate yesterday, and it now goes to President Obama, who has strongly supported the measure, for signing.
Credit unions dodged a bullet in the bill because it did not include a provision to regulate interchange fees-a key source of revenue for credit card issuers-but instead authorized a study of the issue.
The bill expands upon some of the regulations approved by the Federal Reserve and the NCUA, scheduled to take effect July 1, 2010, with several of the provisions taking effect nine months after the president signs it.
The bill requires card issuers to reassess customers' interest rates every six months if the issuer raises the rate; bans raising rates unless a consumer is more than 60 days late paying a bill; and bans both interest-rate hikes on existing balances and double-cycle billing.
CUNA and NAFCU praised the provision on interchange and also said the bill will stop certain abusive practices by card issuers. However, they also expressed concern that it could limit the ability of credit unions to manage risk and could be burdensome on smaller credit unions.
A vote is ongoing regarding an amendment on carrying concealed weapons in national parks if permitted in the surrounding state.