Ellison Moves Credit Card Bill of Rights; Would End Abuses by Credit Card Companies

Congressman Keith Ellison (D-Minneapolis) joined a majority of his colleagues on the House Financial Services Committee in passing H.R. 627, the Credit Cardholders' Bill of Rights Act of 2009 out of Committee. The bill now awaits Floor action.

"Some credit card companies have long engaged in deceptive practices that harm consumers," Ellison stated. "Real reform of this industry is long over-due."

The bill, which passed the Committee 48 to 19, would institute several key reforms. In particular, credit card companies would be required to provide advance notice of rate increases while also placing restrictions on the ability of card companies to raise rates retroactively.

The comprehensive credit card reform package incorporates Congressman Ellison's Universal Default Prohibition Act (H.R. 1637). Under universal default provisions, credit card companies can raise the rate on a credit card based on late payments on other credit cards or loans. Currently, a credit card company can raise interest rates on a card holder even if he or she has never made a late payment to that particular company.

"I am pleased to see that our legislation bans many of the most abusive credit card practices, including universal default," Ellison said. "I have worked hard to stop this harmful practice as part of my work for greater consumer justice."

The landmark legislation will soon be voted on by the entire House of Representatives, which passed it late in the session last year by a margin of 312 to 112. The bill was not taken up by the Senate last year; however, Senate action is expected this session. Upon passage it will move to the President's desk where he is expected to sign it into law.

"With a President in the White House who is actually concerned about the rights of consumers, we now have a golden opportunity to make credit card reform a reality," Ellison concluded.

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