The House Financial Services Committee today approved a measure to put additional restrictions on credit unions and other credit card issuers.
The measure, which the House could take up early next week, bans interest rate hikes on existing balances, over-the-limit fees, double-cycle billing. The cardholders could avoid a higher rate by cancelling the card before the rate takes effect.
It passed 48-19. The House bill is very similar to rules approved last year by the NCUA, the Federal Reserve and other regulators that would go into effect July 1, 2010.
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CUNA and NAFCU supported parts of the measure expressed concern that it would harm ability of their members to manage risk, and thus decrease the availability of credit.
CUNA and NAFCU both said they support the idea of expanding consumer rights, but took issue with 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.
Both supported an amendment that passed in the committee today that exempts small credit card issuers-such as some credit unions and community banks–from having to have Internet notifications of certain information to consumers if they don't have a Web site.
The Senate Banking Committee passed a more comprehensive measure last month but negotiations between both parties are still going on before it comes up for a vote on the floor.
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