Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

House votes to speed up credit card reform

Effective date for provisions would move to Dec. 1 from next February and August.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Julianne Pepitone, CNNMoney.com staff reporter

Bankrate.com
 
Find the best credit card for you among thousands of issuing banks.
Select a card type from the pulldown menu and click on the arrow to begin.
 
301 Moved Permanently

301 Moved Permanently


nginx
What should U.S. nuclear power policy be?
  • It's a safe, clean alternative right now
  • More safety testing is needed
  • We shouldn't use it

NEW YORK (CNNMoney.com) -- The House passed a bill Wednesday to move up credit card reforms scheduled to take effect in February.

In May, President Obama signed into law a credit card reform act to crack down on the way issuers raise fees and interest rates. The reforms are scheduled to roll out in three parts over 12 months.

"Just in time for the holidays, Congress can lock in a ban on interest rate hikes on existing balances, and the tricks that have kept far too many consumers trapped in a never-ending cycle of debt," said bill co-sponsor Rep. Carolyn Maloney, D-N.Y., in a statement issued late last month.

House Financial Services Committee Chairman Barney Frank, D-Mass., was the other sponsor of the bill.

The House passed the bill 331-92. Under the bill, the credit card rules would take effect immediately. (See correction.)

Maloney said credit card companies "brought this on themselves" by taking advantage of the time between when the reform act was signed and when it would go into effect by pushing through even more rate and fee hikes.

5 evil things credit card companies can (still) do

"This marks a step forward in bringing consumers badly-needed relief," Maloney said in the statement.

The Senate will also have to vote to pass the measure expediting the changes in order for it to go to President Obama for his signature into law.

A spokeswoman for Senate Majority Leader Harry Reid, D-Nev., said the Senate may soon vote on its own version of the bill, proposed by Banking Committee Chairman Chris Dodd, D-Conn. Specific details were unclear, as the Senate faces a busy schedule in the coming weeks, the spokeswoman said.

The current schedule. The first portion of the reform act went into effect in August, requiring banks to give 45 days notice on major changes to a contract, including rate hikes. Issuers must also give consumers 21 days notice before a bill comes due.

Also, customers now have the right to reject changes to their contracts -- if they do so, they can pay off their balances at their existing rates within five years.

The second part of the reform is currently slated to kick in next Feb. 22. Major changes include prohibiting arbitrary rate increases on existing balances, and requiring that customers opt into the ability to overdraw their accounts.

The third portion is scheduled for Aug. 22, 2010. It calls for "reasonable and proportional" penalty fees, and would require that issuers review all interest rates and reduce them where warranted.

Correction: An earlier version of this article misstated the effective date of the House bill. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
Google's logos through the years Google changed its logo for the fifth time in 17 years this week. Here's what the old ones looked like. More
How much you should have saved for retirement right now Joe is 50 years old and makes $70,000 a year. He should already have $364,000 saved for retirement. Are you on track? More
The stock market's wild week in 6 pictures It was the wildest week in stocks in recent memory. Here's photos and CNNMoney's tweets of reactions to the panicked selling on Monday and Tuesday, which gave way to a mad buying scramble on Wednesday and Thursday. And then...a selloff on Friday again. More
Sponsors
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play