Tuesday, May 19, 2009
The Credit CARD Act, drafted by Sen. Christopher Dodd, D-Conn., and cosponsored by 21 other members of the Senate, takes aim at sudden and seemingly unexplained increases in interest charges, misleading advertising, the allocation of remittance payments, and unsolicited card offerings targeted at minors.
The bill also calls for a study of credit card interchange rates to be conducted by the Government Accountability Office, a congressional watchdog agency.
Similar legislation (HR 627) has already passed in the U.S. House of Representatives, but that bill contains no provisions related to interchange. These and other differences would need to be worked out in a conference committee session between the House and Senate, provided the Senate passes the Dodd bill.
Dodd, in a statement last week, said the upcoming vote would be "a historic moment for hardworking American families" who, he said, get driven further into debt by questionable credit card company practices.
His comments echoed those of President Obama, who – during a town hall meeting May 14, 2009, in New Mexico – urged lawmakers to have a credit card practices reform bill to him for signing before they leave for the Memorial Day recess.
That timeline, however, could be stymied by a panoply of amendments under consideration. Among them: a proposal to explicitly allow merchants to offer discounts on certain transactions and a totally unrelated measure on guns.
Retailers' Washington lobbyists are turning up the heat on lawmakers for an amendment allowing merchants to surcharge and discount transactions based on card types used. "Being able to discount for more affordable card products would be a win-win situation for everyone involved," the Merchants Payments Coalition, stated in a letter to senators.
No similar provision exists in HR 627, so a surcharging provision would also be subject to negotiation in any House-Senate conference committee meetings regarding credit card reform legislation.
Editor's Note: Note: In a bipartisan vote of 90 to 5, the U.S. Senate passed the Credit Card Accountability Responsibility and Disclosure Act on May 19, 2009. It now returns, with amendments, to the U.S. House of Representatives. President Obama has indicated he would like to sign the legislation into law by Memorial Day, May 25.
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