The House today passed a measure that places greater restrictions on credit unions and other credit card issuers.
The bill, which was approved 357-70, is aimed at stopping what some lawmakers see as deceptive practices among credit card issuers. It would ban 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.
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.
Those groups both expressed concern that certain provisions, such as a requirement that there be a 45-day notice before rate increases were too burdensome. They also oppose a 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 bill would take effect July 1, 2010, the same day that regulations with similar provisions that have been approved by NCUA and other regulators take effect.
The House passed a similar bill last year but it died in the Senate. This year, prospects for passage are much greater in that chamber because of a larger Democratic majority and because of the Obama administration's support.
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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