Credit Card Reform Bill Goes To Obama

(CBS/AP)  Congress on Wednesday sent President Barack Obama a bill with sweeping new rules for the credit card industry that will affect just about every American.

The House voted 361-64 for the bill on Wednesday. The Senate had already approved the measure by a 90-5 vote on Tuesday.

The new restrictions will protect debt-ridden consumers from many of the surprise charges common in the industry, like over-the-limit fees and a charge to pay the bill by phone. People under 21 also will find it difficult to get a card.

As banks scramble to make up for the lost revenue, cardholders who pay off their balance in full each month could see annual fees become the norm and lucrative rewards programs canceled. Companies could also begin charging interest immediately on purchases instead of offering grace periods.

"Many Americans depend on credit cards to get by in this economy, and today they have won a giant victory that ensures they are protected from practices that would drive them further into debt, while also making our economy stronger," said Sen. Christopher Dodd, D-Conn., chairman of the Banking Committee.

Some of the changes, including a requirement that cardholders receive 45-days' notice before their rates are raised, are already on track to take effect in July 2010 under new regulations by the Federal Reserve. But the legislation would put these changes into law and go further in restricting when and how banks charge people and who could get a card.

For example, the bill would require people under 21 to prove first that they can repay the money or that a parent or guardian is willing to pay off their debt if they default.

And consumers who see their interest rate skyrocket because they have been late on a payment would get a chance at their older, lower rate if they pay their bill on time each month for six months.

White House spokesman Robert Gibbs said Mr. Obama looked forward to signing the bill as quickly as possible.

"Obviously this has been something that the president has championed, that the president believes is important to protect consumers," Gibbs told reporters Wednesday. "This is important for people that are represented in this town but don't have a lobbyist. These are important reforms to protect consumers and to bring some commonsense rationality to our financial system."

Once the president signs the bill, the law won't fully take effect for nine months, as CBS News business correspondent Anthony Mason reports. Consumer groups are concerned the credit card companies will use the time to hike up interest rates and fees while they can.

And the bill was not a total loss for the credit card companies, who "killed two proposals to impose caps of 15 percent and 36 percent annual percentage rate on credit cards and other loans," as CBS News investigative producer Laura Strickler reports.

[enriquecaliente]

The credit card industry is something that needs to be done away with. Just like the tobacco companies, who glamorized smoking, knowing full well that it caused cancer. The credit card industry made credit look like a win-win situation for everyone. It was oh so e-z to get.
Which drew people into living above their means. They targeted everyone, even small children. Recently one company had hello kitty cards. The industry is set up for them, the playing field is by no way level at all. The rules are in their favor. Look and learn. Even their own lawyers can't explain the verbiage in the contracts. We need to get away from credit and get back to pay as you earn. Watch and learn.

http://www.pbs.org/wgbh/pages/frontline/shows/credit/view/

[marshmy]

There are many to blame for this mess....the credit card companies, the banks and, ah yes, the consumers.

Also included is that rather rural state...South Dakota....who with it's Republican governor and it's Republican legislature made it very attractive to the credit card industry, by gutting the state usury laws, to locate their operations there in the early 1980's.

Interesting also is the fact that the entire current representation in DC of the state voted against this bill. The two Senators, one Republican one Democrat and the lone Representative, a Democrat.

Why? Because the industry provides some 3,000 (or up to 5,000 depending on the news source) jobs in the state. Also included on the NO side of this legislation is the current Governor, a Republican.

The wealthiest man in the state, listed in the Forbes 400 list, is guess who? The owner of First Premier Bank, and Premier Bankcard, both among the nation's leading credit card providers. He is also the chairman and CEO of United National Corp which is the premier provider of credit solutions for individuals with challenged or derogatory credit.

If you so choose, check out the link below for the "Secret History of the Credit Card"

http://www.pbs.org/wgbh/pages/frontline/shows/credit/more/rise.html

[Shelly Walker]

Once again the government put a bandaid on a gaping wound and praises itself for the effort. This bill does little to actually help people being held hostage by the high percentage rates charged by these bandits. These are obviously concessions the banks have made in order to keeping charging outrageous percentage rates and they must be snickering behind there hand. When are we going to get a government that will go all the way for the American people?

[hungry1968-15]

For those of you who think this is such a great deal. Do you really think the credit card companies are going to take a loss. No, they are going to pass it along to those of us who pay our bills on time and are careful how we use the credit.
Posted by at 4:13 AM : May 21, 2009




And lose the customers?

Not likely.

What is likely is that people like you are going to buy into the fear mongering started by the credit card companies, in an attempt to kill this legislation.

If they try to raise your rates, or impose fees, then start shopping around for another card with a better rate.

Fees will disappear, and rates will drop like a rock if we all stick together.

[scyouth]

The saying used to be "You can't please everybody all the time." Today's politicians have a different maxim "You can't please anybody at any time." This bill seems to be mostly a fob for the public and not too bad a loss for the lobbiests - no wonder it passed by such a large margin - the politicians donations are safe, while the card companies won't make much less money and the unknowing public will be a little better off.

[despido]

"House Passes Legislation Would Mean New Restrictions On Credit Card Industry, Including Limits On Who Can Obtain A Card".....

....But no limits on who can obtain a political bribe. Right, Barack?

[endrepubs]

For those of you who think this is such a great deal. Do you really think the credit card companies are going to take a loss. No, they are going to pass it along to those of us who pay our bills on time and are careful how we use the credit.
Posted by at 4:13 AM : May 21, 2009

to the anonymous poster above:
Well I guess your free ride is over. You have just been piggy backing on the backs of others for too long. No more free air miles or rewards points for you. Annual fees are back and your credit limits reduced. I guess you enjoyed all your perks at others expense. How do you like them (sic) credit card companies now? They even treat their 'good' customers like dirt. You are a 'deadbeat' (industry jargon) you know.

[gangesdak]

This godsend bill is to reward people who spent over their head and started crying later. Now people like myself who always paid the balance in full at each billing cycle would have to subsidize the over-spenders. Now you can again buy the furniture you always dreamt; the first payment is on June 2012- no problem!

[zippiez]

Whew!
Thank Goodness for Congress.
Rather than spending time in the Iron Maiden, we can lie down on the Rack!
Yea!

[collie61]

For those of you who think this is such a great deal. Do you really think the credit card companies are going to take a loss. No, they are going to pass it along to those of us who pay our bills on time and are careful how we use the credit.