The U.S. House Financial Services Committee begins a markup session tomorrow on the Credit Cardholders' Bill of Rights, with the 70-member committee likely to cast votes on the legislation after considering amendments. Observers say the bill, which Rep. Carolyn Maloney, D-N.Y., introduced earlier this year (CardLine, 2/7), stands a good chance of passing because it closely resembles provisions of proposed federal regulations that would prevent many of the credit card practices some lawmakers deem abusive. The Federal Reserve Board, the Office of Thrift Supervision and the National Credit Union Administration proposed new rules in May that would prohibit "any time, any reason" repricing of credit card interest rates and a host of other practices, such as billing cardholders for interest accrued during previous billing periods, otherwise known as double-cycle billing. The comment period for the proposed rules, which have already generated more than 41,000 letters, closes Aug. 4. Maloney today released a report suggesting that inadequate regulation of the credit card industry poses serious risks to the U.S. economy. The 16-page report "Forever in Debt: Anti-Competitive Credit Card Practices and their Impact on the Economy" contends that policies that drive up interest rates and fees may help increase personal bankruptcy rates and may dampen consumer spending as more families divert their incomes to servicing debt. The report also suggests that the longstanding practice of securitizing credit card debt in secondary markets represents a substantial risk to the financial system.
Authoritative analysis and perspective for every segment of the payments industry
Authoritative analysis and perspective for every segment of the industry
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