I forgot to blog about this earlier, but here’s the latest news on Chris Dodd’s bill to bring a little common sense to the credit card industry:
Dodd’s original bill had sought to ban all interest rate increases on existing balances.
Under the compromise measure, agreed to over the weekend by Dodd and Sen. Richard C. Shelby (R-Ala.), card issuers would be allowed to retroactively bump up rates for any borrower at least 60 days behind on payments. However, if the borrower subsequently paid on time for six months, the card issuer would have to restore the original rate.
The bill also would prohibit card issuers from increasing rates during the first year a credit card account was opened and would require them to get a customer’s permission to process transactions that would push the account balance over the credit limit. Another provision would require card issuers to post credit card agreements online.
It’s good to see that the credit card industry still has a friend in Richard Shelby. We certainly wouldn’t want to pass a law that completely prevents a company from retroactively raising the interest rate on a loan it’s already made, would we?
Eh. At least it’s something. Presumably this means that credit card companies can no longer retroactively increase your rates just because you were a few days late paying your water bill, either. Though I think I’d want to read the fine print before I was sure of that.
In any case, now it’s time to see if any Republicans will vote for this bill. They might! Constituents are pissed at credit card companies, after all. In the past Republicans could prevent bills like this from even coming to a vote, but now that they’re going to be forced to take a public position they just might decide that discretion is the better part of valor. Cozying up to your finance industry pals is one thing, but losing your seat over it is quite another.