Senate to Vote on Credit Card Bill this week

by: Jason Springer

Mon May 18, 2009 at 11:00:00 AM EDT

The Senate is hoping to take up legislation this week to reform the Credit Card Process for consumers. If and when it passes the Senate, the two houses of Congress will have to reconcile the bill before sending it tot he President for his signature. And just how bad is the problem these days:

Credit card debt has jumped by 25 percent in the past 10 years, reaching $963 billion in January 2009, according to the Federal Reserve. Delinquency rates have increased by more than a third since the end of 2006, with 5.6 percent of accounts at least 30 days late in the fourth quarter of 2008, according to statistics cited by the White House.
Exacerbating the situation is that card companies, hurting from lost revenue, have in recent months taken punitive measures such as raising interest rates and cutting credit lines for both delinquent customers and those who have paid on time.

Senator Menendez will be at NJIT today to talk about the importance of the bill, which is said to "protect consumers, and especially young consumers, from skyrocketing credit card debt, unfair credit card practices, and deceptive credit offers. The Senator was on the Ed Show on MSNBC last Wednesday night to talk about the bill:

But the Congress apparently has no appetite to make some changes when the credit card companies could still take 36% interest. Sen. Lautenberg tried, but failed to get the Senate to pass an amendment that would cap the Annual Percentage Rate (APR) consumers pay at 15 percent, the same interest rate cap that Congress imposed on loans and credit cards issued by credit unions almost 30 years ago. The Senator pointed to the lack of a national APR which has allowed banks to charge interest rates as high as 41 percent on credit cards while receiving zero interest loans from the Federal Reserve:

"Since credit card companies seem unwilling to put any limit on the unconscionable interest rates they charge to Americans, Congress needs to step in and protect consumers," Sen. Lautenberg said. "Especially during this economic downturn, we have to stop credit card companies from taking an already bad situation for struggling families and making it worse."

Many have voiced concern over the lobbying efforts of the credit card industry that have weakened the legislation. Apparently the bill has been slowed by piggybacking amendments. We'll see if they can get the current bill through the Senate before they head for vacation and then how long it takes to reconcile.

Jason Springer :: Senate to Vote on Credit Card Bill this week