For Immediate Release

Organization Profile: 

Tim Rusch, Demos, (212) 389-1407,

House Passes Credit Cardholders' Bill of Rights

Demos Applauds Strong Protections for America’s Households

the House of Representatives passed legislation to rein in many common lending
practices in the credit card that have been deemed unfair and deceptive. 
The Credit Cardholders’ Bill of Rights Act of 2009, introduced by Congresswoman
Carolyn B. Maloney (D-NY), Chair of the Joint Economic Committee, was passed by
an overwhelming 357-70 bipartisan margin.  Tamara Draut, Vice President of
Policy and Programs at Demos, a non-partisan policy center that supports
legislative measures to re-regulate the credit card industry and bolster the
household economy, issued the following statement on the

“The House of
Representatives has resoundingly declared an end to the era of abusive and
anti-competitive freewheeling in the credit card market.  With today’s
vote, our representatives in Congress have joined the chorus of the more than
50,000 consumers who wrote the Federal Reserve Board to urge for stronger
protections, and President Obama, who personally warned major credit card
issuers that ‘The days of any-time, any-reason rate hikes and late-fee traps
have to end.’

households are in dire need of relief from worsening lending standards. As the
financial sector continues to reap the consequences of the subprime debacle,
banks are openly increasing interest rates and fees on their credit card
customers in order to cover losses in other areas. The only reason this is
possible is because in the absence of almost any regulation, issuers have tilted
the playing field heavily in their favor.

“Demos research
shows that inequitable credit card underwriting practices have shifted the cost
of credit to individuals least able to afford it, while at the same time
generating some of the highest profits in the entire banking sector. Low-income
families and households of color, primarily African Americans and Latinos, bear
the brunt of the cost of credit card deregulation through excessive fees and
high interest rates.  The lack of common-sense protections has made this
recession much deeper and more painful for these

The Credit
Cardholders' Bill of Rights Act would level the playing field between borrower
and lender by putting an end to some of the most arbitrary, abusive, and unfair
credit card lending practices that trap consumers-particularly disadvantaged and
minority borrowers-in an unending cycle of costly debt. The bill

End arbitrary and unfair interest rate increases on
existing balances,

Prevent credit card companies from gaming consumer


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Prohibit unfair and hidden interest rate charges on
balances repaid during the grace period, and

End unfair late fees for on-time

Treasury Secretary Timothy Geithner met with Demos and other consumer advocacy
and civil rights organizations to announce its goals for long-term credit card
reform.  Many of the Administration’s proposals, such as requiring credit
card companies to apply payments made by consumers to the highest interest rate
debt they owe and prohibiting card issuers from charging fees for over-limit
transactions unless cardholders provide explicit permission, were included in
the final version of the House bill.

While the Federal
Reserve and other agencies have finalized rules similar to the protections in
the Maloney bill, today’s action on the part of the House represents one of the
final steps in codifying these proposals into law, ensuring that regulators will
not weaken these protections in the future.

Similar legislation has been approved by the Senate
Banking Committee and is expected to come up for a vote before the full Senate
in the coming weeks.

For more
information about Demos' research on the growth of debt and changing credit
industry industry practices, or to read more about the 2008 Demos
Book "Up To Our Eyeballs: How Shady Lenders and Failed Economic Policies Are
Drowning Americans In Debt" visit



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A multi-issue national organization, Demos combines research, policy development, and advocacy to influence public debates and catalyze change. We publish books, reports, and briefing papers that illuminate critical problems and advance innovative solutions; work at both the national and state level with advocates and policymakers to promote reforms; help to build the capacity and skills of key progressive constituencies; project our values into the media by promoting Demos Fellows and staff in print, broadcast, and Internet venues; and host public events that showcase new ideas and leading progressive voices.

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