Pols Take Credit for Bill

everal New York-area members of Congress have introduced legislation to reform the credit card industry. The most comprehensive is a series of proposed changes, the Consumer Credit Card Protection Amendments of 1999, introduced by Rep. John LaFalce (D-N.Y.).

A companion bill has been introduced in the Senate by Sen. Chuck Schumer (D-N.Y.). It would, among other things, require that credit card solicitations provide full disclosure of permanent interest rates, not just "teaser" rates, and make it clear how long it will take to pay off the card balance if only minimum monthly payments are made.

The Schumer bill also would:

• Ban credit card issuers from canceling accounts or imposing new fees on cardholders who routinely pay off monthly card balances in full.
• Ban credit card accounts for those under 21, except with parental approval or evidence of means of payment.
• Require full disclosure in billing statements of required payment due dates and applicable late payment penalties.
• Roll back any interest rate increase when the customer notifies the issuer he is canceling the card.
• Prohibit card issuers from charging fees or penalties for over-limit spending when the issuer itself authorized the expenditure.

In addition, Rep. Robert Menendez (D-N.J.) will be reintroducing the Fair Credit Card Application Act. The proposed legislation would prevent credit card companies from issuing cards consumers did not request.

The bill also would require prominent warnings that an alternate card with different benefits, interest rates and terms might be issued. Consumers would be given the clear option of declining alternate cards.

Both bills, though they do not limit fees or interest rates, face tough sledding in a Congress where the banking industry is a major campaign contributor to House and Senate candidates, pumping more than $2 million to members of the House Banking Committee in1998.

The single largest giver? Bank One, which donated a total of $201,300 to banking committee members.

Russ Baker

Special Report: Credit Quicksand Traps Consumers (09/19/1999)
Special Report: Getting Yourself Out of Trouble (09/19/1999)


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