The highly popular credit card bill has finally passed from the Senate with a vote of 90-5. Earlier, the senate had promised that they would get the bill ready for the President's desk by Tuesday and they have delivered.
The credit card bill of the Senate aims to correct many credit card industry practices, which consumers have found to be unfair and deceptive. Among many things, it will stop the industry practice of arbitrarily raising interest rates and requiring disproportionately large fees, requiring the industry to issue advance notices for interest rate changes and controlling “over limit” transactions as well as the fees involved.
The bill will also address the controversial “universal default” practice of credit card companies. This will stop credit companies from raising the interest rates of cardholders when they are late on a separate, unrelated debt.
Under the bill, credit card companies will also have to follow strict guidelines for marketing to college level consumers, addressing the increasingly problematic debt problems of college students.
The credit card industry is naturally against the credit card bill. They have stated that the bill may dry up the available credit for consumers. The industry has also stated that when the bill is implemented, they will have to recoup their losses through other means. This will probably mean an increase in annual fees and cutting back on the reward points system, such as the frequent flier points system.
Scott Talbott, lobbyist of the industry trade group Financial Services Roundtable, said that, “The restrictions on pricing imposed by the credit card bills will result in changes elsewhere, including a return of annual fees and a termination of rewards programs. Those who manage their credit well will be subsidizing those who don't.”
The debate over the credit card bill has gone on for several months and during its debate, the banking and credit card industry have found themselves to be completely helpless. It is interesting to note that the banking and credit card industry have usually had a large influence in Washington. This time around, they became the target of constant criticisms from the Senate, with their abusive and deceptive scrutinized and questioned.
The credit card bill is also notable for one other thing. It is one of the rare bills that enjoyed bipartisan success, which is more notable considering what the political climate between the democrats and the republicans has been this year.