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Legal Commentary

: TalkLeft

Credit Card Act Passes Senate

By Jeralyn

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The Credit Card Accountability, Responsibility and Disclosure (CARD) Act passed the Senate today by a vote of 90 to 5. From Sen. Mark Udall (received by e-mail, no link):

The 90-5 vote for the Credit Card Accountability, Responsibility and Disclosure (CARD) Act culminates four years of work by Senator Udall to clean up the fine print and bring fairness and common sense to the credit card business. Udall was a co-sponsor of the Senate Credit CARD Act, and as Congressman, he authored the bill in 2005, which became the Credit Cardholders’ Bill of Rights and passed the House of Representatives last month. The House must now take a second procedural vote on the Senate bill before the final legislation can be sent to President Obama for his signature.

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“All along, this battle has been like the story of David versus Goliath, and today, David finally won,” Senator Udall said. “Today’s vote in the Senate is a victory for consumers who play by the rules and who just want to see some fairness and common sense brought to the credit card business. Consumers shouldn’t be subject to constantly changing terms or rate agreements printed so small you need the Hubble telescope to read them.”

What the bill does, below:

The Credit CARD Act bars the use of “universal default” clauses – provisions that allow card issuers to impose a new, higher interest rate on a credit card account based on financial activity unrelated to that account. The bill requires advance notice of interest-rate increases and requires that cardholders be able to avoid paying a higher rate by cancelling the card before that rate takes effect. If a card is canceled before a rate increase, the remaining balance will be subject to the terms and conditions – especially the lower interest rate – that applied at the time of cancellation.