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Washington
Senate could finish credit bill of rights this week
WASHINGTON (5/12/2009)—The Senate on May 11 began discussion of H.R. 627, the Credit Cardholders' Bill of Rights Act, with Sen. Chris Dodd (D-Conn.) offering a substitute version of the legislation for debate. The Senate bill would prevent lenders from making arbitrary changes to the interest rates or terms associated with a card that holds an existing balance. The bill would also require lenders to maintain any lower, so-called “teaser” rates for six months and would prevent lenders from increasing the yearly annual percentage rate (APR) on a credit card for the first year that the account is open. Additionally, card issuers would not be permitted to change the payment conditions of a given card. While the amendment, as introduced, would not take any immediate action on interchange fees, it would commission the Government Accountability Office to study interchange fees. A House version of the credit card bill did not address such things as the interest rate increases on existing balances. It did, however, propose gift card restrictions. According to the Credit Union National Association (CUNA), Sen. Richard Durbin (D-Ill.) could present amendments on interchange fees and usury ceilings. (See related story: CUNA asks Senators to oppose interchange fee amendment) It is also thought that Durbin could advocate for the creation of a financial products safety commission. This amendment, if presented, could be similar to S. 566, the Financial Product Safety Commission Act of 2009, which establishes a one-stop regulator for regulate financial products, similar to the current Consumer Products Safety Commission. CUNA is concerned that this regulatory agency could add unneeded complexity and compliance costs on top of those already imposed by the current regulatory scheme. The Senate is widely expected to complete its debate and act on this bill soon, as President Barack Obama this weekend urged Congress to take swift action on credit card legislation so that he could sign the bill into law by Memorial Day. The president will also discuss more broad credit-related issues at a town hall meeting scheduled for later this week.


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