Sens. Chris Dodd, D-Conn., and Carl Levin, D-Mich., introduced a credit card reform bill Wednesday that would rein in a slew of common practices in advance of hearing the Senate Banking Committee is holding on card consumer protection.
The bill would put tight restrictions on how card companies increase interest rates and charge fees.
It would prohibit card issuers from changing rates and terms any time for any reason. It would ban increasing interest rates on existing debt and would require a 45 day notice when rate changes were about to occur.
It would prohibit companies from charging interest on penalty fees, bans double-cycle billing, and includes special protections for younger borrowers.
The bill also calls for the Government Accountability Office to study the impact of interchange fees on consumers and merchants, and on creating a card safety rating system.