Senate passes credit card reform legislation

The U.S. Senate passed H.R. 627, the Credit Cardholders’ Bill of Rights Act of 2009, a law designed to make it more difficult for credit card companies to raise interest rates on their customers unless specific conditions exist related to the creditworthiness of the cardholder. The vote was 90-5. Sen. Carl Levin of Michigan praised the legislation:

“Credit card companies crossed line after line with outrageous practices and underestimated the ability of this Congress to turn public outcry into public policy. Hearings before my Permanent Subcommittee on Investigations dramatized the credit card abuses, including retroactive interest hikes on consumers who paid their bills on time, excessive penalty fees and interest rates, and fees to permit a payment on a credit card debt. The credit card industry is finally being called to account. With the help of the House and the President, this strong credit card reform bill will be enacted into law by the end of the week.

“Thank you to Chris Dodd and Richard Shelby for taking on this great task and taking a huge step for American consumers. The Senate legislated over the objections of powerful forces and prevailed. Millions of Americans will benefit now that some balance of power is being restored between card holders and card issuers.”

The Senate version of this bill is tougher than the House version passed last month. A conference will have to reconcile the two versions before sending the bill to President Obama, who has pledged to sign it.