April 6,2009
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Dodd's Credit-Card Bill Inches up Capital Hill, Pt.1
Major tenets of the bill.As Senator Dodd pushes his credit card reform bill through the Senate Banking Committee, of which he chairs, he is finding it to be a slow-go. He knows he is going to need a lot more momentum than the 12-to-11 favorable vote he managed in order to wheel it across the obstacle-laden Senate floor. He's already seen it flounder and stall last year when he tried to pass his "Credit Card Consumer's Bill of Rights". It stalled in Committee and never got out. So, this is his second go-around. A similar credit card protection bill, sponsored by Rep. Maloney, had easily had passed through the House last year but no bill has successfully made it all the way through Congress as of yet.
Now, Senator Dodd realizes he's going to off-load some of the weight from the credit card-reform wagon and broaden support if it's going to successfully clear the crest of Capital Hill. The Senator is not dismayed, however. He responds: "This is the first step in a process. This was going to be difficult--I knew that. My intent is to work things out and move forward." Some of the tenets of the bill are:
o Prohibit unfairly raising interest rates on credit cards;
o Prohibit retroactive rate increases to existing balances;
o Require more open disclosures before imposing changes on credit card accounts;
o Regulate control over punitive fees and rate hikes for over-the-limit infractions;
o Require credit card lenders to obtain permission from parents/guardians before offering accounts to those younger than 21 years of age.In addition to these restrictions, the Senator also wants to shore up security in credit card lending. The plan is to increase the authorities of both the FDIC (Federal Deposit Insurance Corp) and the NCUA (National Credit Union Administration) Rather than just another band aid, he wants to affect a lasting cure to our ailing credit card system. The senator's outlook is: . "We cannot recover if we allow practices to continue that drive so many families deeper and deeper into debt."