Later this week or earlier the next, the United States Senate will begin discussion over the controversial credit card legislation House bill sponsored by Rep. Carolyn Maloney.
The bill aims to limit fees and rate hikes of credit cards in an effort to protect debt laden consumers. The bill was first pushed and approved in the House of Representatives at the end of last month. Support for the bill in the House of Representatives was impressive, passing with a vote of 357 to 70. Furthermore, the bill also seems to have the support of President Obama who expects to sign the bill into law by the end of May.
After passing through the House of Representatives, the bill is now in the Senate where it will be further deliberated and additional measures and changes in the details of the bill are expected to be made.
Old timers in Capitol Hill say that the Senate will probably pass a bill similar to what the House passed last week. However, many details still remain up for debate and the final form of the bill to be passed by the Senate will most probably depend on a few Senators who are pushing for a compromise between proposals of the bill and what they perceive to be the needs of the credit and banking industry.
Once the bill is signed, it is expected to pass into law several guidelines newly passed by the Federal Reserve which ensures that repayment balances of debtors are credited proportionally. This will hopefully give consumers the chance to whittle down their accrued debts at the highest interest rates.
The bill being made by the Senate has been described as being tougher than the bill that the House recently passed. However, some Republicans are voicing the concerns of the banking industry that too strict legislation may lead to a shortage of available credit cards, with those having poor credit history being hardest hit.
Peter Garuccio from the American Bankers Association had this to say: "Our concern is that as policymakers move forward, that they strive to find the right balance between enhancing consumer protection and ensuring that credit cards remain available.”
One of the most active Senators working for a compromise is Chris Dodd, the Chairman of the Senate Banking Committee. He is currently working on an effective compromise with Senator Richard Shelby, the Banking Committee's top Republican representative. It is expected that Dodd's bill would present some major changes to what the House passed earlier.
The Credit Card Holder's Bill of Rights is certainly a hot topic in financial circles nowadays and the final form of the bill will depend greatly on the type of compromise that the Senate will settle on. When the final form of the bill is passed, it might just be the salvation that Americans swamped in debt are looking for.