May 13, 2009
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News: Senate Stalls CC Reform
Differences between Democrats and Republicans have threatened credit card reform legislation from passing through the Senate by the targeted date. Proponents for the bill which is designed to ban deceptive and unfair practices by credit card companies had hoped to have the legislation on the President’s desk for signing by Memorial Day. The slowdown is attributed to a debate over an amendment to the bill that would allow merchants to offer a discount if a consumer would use a particular debit or credit card that changes the retailer a lower interchange fee. Some Senators are concerned that if they don’t come to an agreement by next Friday, the bill will take several weeks longer before signing into law. On Friday, May 22nd, Congress will recess for a week to observe the Memorial Day Holiday.
The U.S. House of Representatives approved their version of credit card reform legislation on April 30th by an overwhelming majority of 357–70. Reports were that if the two sides were able to reach an agreement on the proposed amendments Thursday, the Senate could vote on it later in the evening. If no agreement is reached, the bill would be tabled until the following week. Major financial institutions including Citigroup, JPMorgan Chase, Capital One Financial, and Bank of America have been anxiously awaiting the results of the Senate and House action and have opposed any additional regulations. They justify their arbitrary interest rate increases and exorbitant late fees and over-the-limit penalties as necessary to weather the storm from massive credit card delinquencies and defaults.
Senator Chris Dodd (D-CT) authored the Senate version of the bill which validates the Federal Reserve’s new regulatory codes that do not go into effect until July 2010. Many lawmakers and consumers feel this is too long to wait and that changes need to occur immediately. President Obama has demonstrate on numerous occasions his solid support for credit card reform and is urging lawmakers to have the bill to him for signing by the end of May.