Senate Approves Credit Card Crackdown Bill
WASHINGTON - The Senate on Tuesday approved a bill to curb sudden credit card interest rate increases and hidden fees, with President Barack Obama expected to sign the measure into law by the end of the month.
The first of several financial regulation reforms expected during the Obama administration, the bill must go to the House of Representatives again before reaching the president. The House approved it in similar form last month by a 357-70 vote.
House Democratic Leader Steny Hoyer said on Tuesday, "We expect the credit card bill to come over here (this week). We expect it to probably be in a fashion that we can pass it."
Analysts said the bill would hurt the profits of major card issuers such as Citigroup, Bank of America, JPMorgan Chase and Capital One, but that its impact was already largely factored into their share prices.
Obama on Thursday urged Congress to complete a final bill so he can sign it into law by the end of May.
The Senate bill would limit, but not prohibit, card issuers' ability to raise interest rates on existing balances.
It would require 45-day notice of most rate increases; limit rate increases for new and promotional-rate accounts; prohibit certain kinds of fees; and bar extension of credit to consumers under the age of 18, with narrow exceptions.
In addition, the bill would require more disclosure of the terms of card agreements; require periodic review of a cardholders' interest rate and open the possibility of lowering the rate if warranted; and direct the Federal Reserve Board and other regulators to write more detailed rules.
(Reporting by Kevin Drawbaugh and Donna Smith, Editing by Chizu Nomiyama)