SCHUMER INTRODUCES LEGISLATION PROTECTING CONSUMERS FROM UNSCRUPULOUS CREDIT CARD PRACTICES
Senator Calls For Bankruptcy Debate to Include Credit Card Lending Reform
US Senator Charles E. Schumer (DNY) today introduced legislation in the Senate that would end the practices credit card companies use to lure and overcharge customers. The "Consumer Credit Card Protection Amendments Act," introduced in the House of Representatives by Rep. John LaFalce (DNY), would protect consumers from being assessed excessive fees and unfair penalties by their credit card companies. The legislation will be cosponsored by Sen. Dick Durbin (DIL).
"Credit card companies have taken advantage of consumers for too long," said Schumer. "Many cardholders, especially young adults looking to build a credit history have been sucked in by low 'teaser' rates and unclear disclosures. Once they use their cards and ran up high balances they realize that the promises of low rates and unlimited spending power were hollow."
Among its provisions, the legislation would:
- Require credit card companies to disclose to the consumer all information regarding payment plans, including information on how long it would take cardholder to pay a balance through only minimum payments.
- Prohibit card companies from charging penalty fees to customers who pay their balances in full.
- Require disclosures of all hidden fees and interest rate information.
- Limit fees that put a cardholder over their credit limit.
- Require that cardholders retain the option to cancel their cards upon notification of an interest rate change, while having their standing balances grandfathered by the previous rate.
"It is outrageous that credit card companies are penalizing cardholders who keep minimum balances and pay them off in full each month. Credit card companies should not punish customers who do everything right.
"This year, Congress will again tackle legislation reforming our bankruptcy laws," said Schumer. "In order for any bankruptcy legislation to be considered fair and comprehensive, considerations must be made for debtors as well as creditors, especially if those debtors have been forced to declare bankruptcy because of unfair credit card tactics."
The Senate Judiciary Committee has scheduled a markup tomorrow on the Bankruptcy Reform Act (S. 625). Action on the Senate floor is expected in April. The House Judiciary Committee's Subcommittee on Commercial and Administrative Law is markingup Bankruptcy Reform legislation this week.
"Credit cards have brought too many Americans to the verge of bankruptcy," Schumer concluded. "Consumers need the tools to not only evaluate the consequences of their own borrowing, but also a fair playing field for repaying their debts, avoiding the bitter pill of bankruptcy altogether."
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