On April 30, the U.S. House of Representatives passed the bipartisan Credit Card Bill of Rights (H.R. 627), by a vote of 357-70. 105 Republicans joined 252 Democrats in passing the bill. It passed the U.S. House Committee on Financial Services with a 48-19 vote, before moving on to the floor of the House.
    The legislation itself has been in the works for a while and comes on the same day that a mortgage reduction bill was defeated. The latter was a pronounced victory for bankers, however, the former credit card bill is being-long touted as a victory for consumers.
   The bill ends double-cycle billing — which computes interest on the current balance of the credit card as well as the average daily balance from the previous billing. The bill also limits fees and regulates billing and payment practices. It mandates that credit card companies provide 45 days advance notice of any impending rate hike, giving consumers time to pay off their balances and shop for a better deal. Amendment to the bill that would have placed controls on interchange fees, however, was defeated.
   Also passed on April 30, 2009 were House amendments proposed by various members of the house which included a number of amendments to the Credit Cardholders' Bill of Rights that would strengthen consumer protections in the bill. Some of those amendments affect the following areas:

    Student Credit Cards

   Limits credit lines to the greater of 20 percent of a student's annual income or $500, without a co-signer and requires creditors to obtain a proof of income, income history and credit history from college students before approving credit applications.

    Troops and Disabled Veterans

   Restricts credit card companies from making adverse reports to credit rating agencies regarding deployed military service members and disabled veterans during the first two years of their disability.

    Monthly Promotional Rate

    Requires a 6-month period for a promotional credit card rate before the standard rate may be increased

    Choice on Over-the-Limit Fees

   Requires credit cardholders to opt-in to receiving over-the-limit protection on their credit card allowing the credit card company to charge an over-the-limit fee.

    Fair Allocation

    Requires credit card issuers to allocate payments over the minimum to the portion of the remaining balance with the highest outstanding APR first, and then to any remaining balances in descending order.

    Minimum Payment Disclosures

   Requires issuers to provide information to card holders regarding minimum payments including a minimum payment warning statement: "making the minimum payment will increase the interest you pay and the time it takes to repay your balance" on all monthly payments and the total cost to the holder of eliminating the outstanding balance in 12, 24 and 36 months.

   The passage of this bill in the House also comes just one week after President Obama met with card company executives to talk a bit tough and let them know of his concern in protecting consumer interests. Obama said, "The days of anytime, any reason rate hikes and late fee traps have to end."
   The bill was sponsored by Rep. Carolyn Maloney (D-NY). Maloney said in a statement that the new bill changes credit card rules aimed at unfair, deceptive and anti-competitive practices. She also stated that the bill sends a message to the American public that "responsible regulation is part of the new era of financial responsibilityÑand that responsibility works both ways, for companies as well as consumers. By passing this bill, we are helping everyone with a credit card."
   Rep. Luis Gutierrez, Chairman of the Subcommittee on Financial Institutions and Consumer Credit said that consumer credit debt is high and this bill is an attempt to curtail deceptive tactics, such as universal default terms spelled out in fine print. He said the bill Òresponds by applying common-sense regulations that reward hard work and responsibility rather than high-flying finance schemes."
   Some Republicans opposed the bill. John Berlau, Director, Center for Investors and Entrepreneurs Competitive Enterprise Institute in Washington, D.C. said that the bill "goes beyond disclosure and imposes paternalism that limits consumers' choices as well as sound risk-based pricing practices by banks that issue credit cards. This will result in less availability of credit and actually force cardholders to pay higher rates in many instances."
   The bill will now go on to the Senate where it is expected to pick up more momentum and be on the President's desk for signature by Memorial Day, 2009. If passed, changes will take effect in July of 2010. However, the bill requires that 45 days notice is required to be given to cardholders prior to any interest rate hike. This requirement is to take effect within 90 days of full passage.