Credit Card Reform Bill Needs YOUR Help!

Danny Schechter (whose opinions I deeply respect) reports today on a real wallet issue for most folks. As someone who has been forced into "arbitration" by an insurance company that refused to pay for the accident that one of its customers admitted responsibility for and got the tickets for, this bill does not go far enough in consumer protection although it is much better than the nothing we have now.

After The Senate Passes Credit Card Reform Bill, What Now?

WHY WASHINGTON DOESN’T WORK

It feels good.

I know many people have been working on the credit card abuse issue for years and watching proposals for reform be killed in Congressional session after session.

When I started working on the issue back in 2005, featuring it in my film, IN DEBT WE TRUST, there were many progressives who just weren’t interested, not realizing perhaps that it touched so many lives and could bring people together.

Now, at long last, a reform bill was passed by the stunning vote of 90-5 in the US Senate a clear sign of how anger, on this issue, crosses partisan lines.

On Wednesday, the bill, S 414, goes to a conference between the House and Senate and you can bet that industry lobbyists will do everything they can to delay its implementation and scuttle its impact. ConsumersUnion.org, which has been fighting on this for so many years, advises:

“The banks are pulling out all the stops. On the front page of today’s New York Times they claim that giving you the deal you signed up for is actually bad for you.

That’s malarky.

After gambling away their capital on bad investments, then taking billions in taxpayer bailouts, the banks turned on their own customers. They hiked interest rates on millions of consumers’ credit cards — including those who pay on time.

They changed your cards from fixed rate to variable, added fees, changed your due dates and tried every trick in the book to squeeze more money out of you. The banks are busting the family budget.

Tell your Representative to vote YES and enforce the new rules as soon as possible!”

Who Voted Against it?

“Both of South Dakota’s senators, Democrat Tim Johnson and Republican John Thune, voted against a credit card reform bill that the Senate overwhelmingly passed Tuesday.” READ FULL STORY HERE

Why? Because the industry is based in that state. Joining them, Kryl of Arizona, Bennet of Utah, and Alexander of Tennessee.

Still at issue: When does it comes into effect?

Consumer organizations strongly support the legislation and want the Senate bill’s effective date moved up to this year instead of 2010. The House bill would not take effect until a year after enactment. Why not NOW?

What’s wrong:

The American Bankers Association says the legislation would jeopardize access to credit for some consumers, but neither the Senate nor the House bill would prevent card companies from imposing high interest rates on the highest-risk customers.

The bill includes a controversial amendment that would permit people to carry firearms in national parks. How Great!

What The President Says

OBAMA: This is America and we don’t begrudge a company’s success when that success is based on honest dealings with consumers,” Obama said. “We need reform to restore some sense of balance.” READ FULL STORY HERE

AP: Senate debate on the credit card bill comes as a senior House Democrat tried to assure small, local banks that they weren’t the target of financial reform efforts in Congress.

The House Financial Services Committee, led by Rep. Barney Frank, plans to consider in June legislation that would create a government entity that would monitor risk and dissolve large financial institutions that threaten the financial system. The cost of a “systemic risk regulator” and “resolution authority” is expected to be borne by the banking industry.

CreditCards.com: What’s in the Bill?

“The House bill — the Credit Cardholders’ Bill of Rights — sailed through in a 357-70 bipartisan vote. It allows retroactive interest rate hikes if an account holder is more than 30 days late paying a bill. Both bills also allow interest rate hikes when promotional or “teaser” rates expire, when the account has a variable interest rate and when the card user reneges on terms of a workout plan for debt repayment. Both bills also prohibit interest rate hikes during the first year of a new account.

Other provisions of the Senate bill include:

• 45 days’ advance notice of significant changes in credit card terms.

• Banning universal default and double-cycle billing.

• Prohibiting over-limit fees unless consumers agree to allow transactions that exceed their credit limits to go through rather than be denied.

• Fees for late payments, over-limit charges or other penalty fees must be reasonable and related to the violation.

• Extending the life of gift cards and gift certificates so that they cannot expire within five years of activation. Banning dormancy or inactivity fees on gift cards unless there has been no activity in a 12-month period.

• Banning credit cards for people under the age of 21 unless they have adult co-signers or show proof that they have the means to repay the debts. College students must get permission from parents or guardians to increase credit limits on joint accounts they hold with those adults.

• Requiring that card issuers disclose how long it would take to pay off credit card balances if cardholders make only minimum payments each month and how much users would have to pay each month.

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Christian Science Monitor: What The Bill Does Not Do

Among the items [painfully] missing from the legislation:

• No cap on interest rates or fees. It does not put a maximum on the interest rates or fees that credit-card companies can charge consumers.

• Disputes don’t go to court. It does not do away with the requirement that consumers with a dispute against their credit card companies take it to arbitration, rather than to the courts. Arbitration decisions typically favor credit-card companies, consumer groups say.

• Interchange fees. The highly controversial issue of “interchange fees” was deferred to a study by the US Government Accountability Office. Retailers wanted Congress to regulate the fees charged to merchants every time a consumer uses a credit card for payment, eating into their profits.

These omissions signal that “the banks still have residual power on Capitol Hill,” says Ed Mierzwinski, a consumer advocate with US PIRG in Washington. “Those are things we’ll need to do in the future. It’s still a great bill, though.” READ FULL STORY HERE

• Credit Card Industry Going After It’s Best Customers

Suzan _______________________