The House Financial Services Committee approved a bill by Rep. Carolyn Maloney Thursday that would rein in a slew of common credit card practices. The committee approved the measure with a vote of 39 to 27 including two Republicans who cosponored the bill Reps. Walter Jones and Chris Shays.
The Senate is not expected to touch the issue this year and the bill's outlook in the House is also in doubt. Lawmakers said the vote was intended to send a message to the Federal Reserve Board not to weaken its proposal to ban unfair and deceptive card practices.
The bill largely mirrors that plan but adds a few additional provisions. It would prohibit raising rates on existing debt except when a consumer pays a bill 30 days or more late, a promotional rate expires, or an index tied to the rate increases. The bill would ban double cycle billing, place restrictions on fees and bar minors from obtaining cards.
The bill's fate had been in doubt up until the final moments. Chairman Barney Frank said earlier in the day Thursday he was not sure the bill, which he supported, would pass. He said it was possible a substitute measure from Rep. Mike Castle, R-Del., which would have gutted the bill and replaced it with a nonbinding resolution supporting the Fed proposal, would pass instead. But the House Financial Services Committee rejected the Castle substitute 39 to 28.
The committee voted 57 to 9 to add an amendment by Rep. Mel Watt, D-N.C. that clarified nothing in the bill was meant to impede the Fed from finalizing its card proposal by yearend. It also said that the new regulatory standards would apply to transactions 30 days after it had been adopted. The measure is meant to clear up concerns by the banking industry that by defining practices as unfair or deceptive banks could be sued for previous practices.
The committee rejected an amendment 39 to 27 by Rep. Gary Ackerman, D-N.Y., that would have banned card companies from charging customers to pay bills online or by phone.