Senate Committee Passes Landmark Credit Card Bill

Leaders of national and Connecticut-based consumer organizations today
lauded comprehensive legislation passed by the Senate Banking Committee to curb predatory credit
card lending practices. The groups praised committee Chairman and bill sponsor Christopher Dodd
for his strong efforts to enact the legislation.

Introduced by Chairman Dodd and 18 co-sponsors, the Credit Card Accountability
Responsibility and Disclosure (CARD) Act would ban a number of practices that credit card issuers
have used to unjustifiably increase interest rates, fees and other charges. It passed the Senate
Banking Committee yesterday, moving to the Senate Floor for a final vote.

"This is the first time ever the Senate has moved legislation to rein in abusive credit card
practices," said Travis Plunkett, legislative director of the Consumer Federation of America. "We
applaud Senator Dodd for his efforts to pass this sweeping bill in the face of strong opposition from
the credit card industry."

"The CARD Act recognizes that credit card companies target unsuspecting college students
for overpriced credit cards even when they don't have jobs or an ability to repay," said Ilicia
Balaban of ConnPIRG. "The bill requires them to treat students like they are supposed to treat other
consumers, fairly."

The Federal Reserve Board issued rules to stop unfair credit card practices, giving the
industry until July 1, 2010, to implement the new practices. A number of major card issuers are now increasing fees and interest rates on millions of Americans before the new rules take effect.
The House of Representatives passed legislation last year that was similar to the Federal Reserve
Rules and is likely to do so again this year.

The Credit CARD Act has a number of protections that extend beyond those of the Federal
Reserve rules and House legislation. It requires credit card companies to stop:

o Applying unfair interest rate hikes retroactively to balances incurred under the old rate.
o Hitting consumers with high penalty fees that are not related to the costs that credit card
companies incur.
o Assessing hidden and unjustified interest charges on balances already paid off.
o Piling on the debt that consumers owe by requiring them to pay off balances with lower
interest rates before those with higher rates.
o Offering credit to students and young consumers without considering their ability to repay
the loan.

"Senator Dodd's bill picks up where the Fed's rules leave off, protecting all Americans from
unjustified or excessive fees and stopping retroactive interest rate hikes that only bury struggling
families in insurmountable debt," said Lauren Saunders, Managing Attorney at the National
Consumer Law Center.

"This bill will put the force of law behind the Federal Reserve's new rules, and will protect
consumers by strengthening these reforms," said Pam Banks, senior attorney for Consumers Union.
"Credit card lenders are trying to take advantage of the fact that the Federal Reserve's rules don't go
into effect until 2010 by maximizing short-term income from credit card interest payments, even if
the consequences are harmful to their own customers."

"We know that there is a battle ahead to preserve the strong consumer protection standards
in this legislation, but we are ready for the challenge and grateful that Senator Dodd is with us in
fighting the unfair, anti-consumer practices of credit card companies," said Linda Sherry, director of
national priorities for Consumer Action.

For more information about credit card reform, visit the Consumers Union website
www.CreditCardReform.org.