May 19, 2009
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News: Senate Passes CC Reform Bill
Any individual, who hailed that the credit card reform bill wouldn’t pass through the Senate before week’s end, is in for a big surprise. On Tuesday, the Senate passed the strongly debated bill by an overwhelming majority of 90 to 5. The long anticipated bill had produced a fury of debates across the county in homes, business, committee meetings, and more. President Obama had pushed to have the bill which passed the House on April 30th on his desk for signing by Memorial Day. The Senate bill must first be reconciled with the House version prior to that happening; however, negotiations are expected to move quickly. The legislation places restrictions on lenders regarding interest rate increases, over the limit fees, and other unfair practices. Credit card companies voiced their opposition to the bill saying regulation of credit card interest rates would reduce lending funds and ultimately hurt the consumer. Clearly, not many lawmakers bought their story.
Additional provisions of the legislation mandate that credit card companies wait until the consumer falls 60 days delinquent before raising interest rates. Afterwards, if the consumer meets the appropriate minimum by the designated due date for six months, the lender is then required to reduce the interest rate back to its original figure. The bill also requires lenders provide a 45 day notice of any interest rate increase. Lenders are also required to mail credit card statements out 21 days prior to the payment due date. Oddly, an amendment was proposed by Senator Tom Coburn (R-OK) allowing loaded guns in national parks was added to the bill.
Four Republicans voted against the legislation including Senators Lamar Alexander (TN), Robert Bennett (UT), Jon Kyl (AZ), and John Thune (SD). One lone Democrat, Tim Johnson (SD) opposed the bill. South Dakota has a very large employment base of credit card employees which would account for the opposition by both parties. After the vote was completed, Senator Harry Reid stated major lenders will no longer be allowed to “take advantage of hardworking Americans.”