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Release Date: 04/29/2009

Consumers Union Applauds President Obama for Working to Strengthen Credit Card Protections for Consumers

Obama Offers Support for Stronger Safeguards as House Prepares to Vote on Bill

WASHINGTON D.C. – Consumers Union applauded President Obama today for working to strengthen legislation to protect consumers from abusive credit card lending practices.  In a news conference this morning, Treasury Secretary Timothy Geithner announced White House support for a number of amendments to the Credit Cardholders Bill of Rights (HR 627) that would provide consumers with additional protections.  The House is expected to vote on the legislation on Thursday.

“After banks have gotten billions from taxpayers, it’s about time that American families get  
relief from abusive credit card interest rate hikes and penalties that trap them in a cycle of debt and make it difficult to make ends meet,” said Pam Banks, Policy Counsel for Consumers Union.  “President Obama deserves credit for working to make sure consumers get the protections they deserve.  We urge Congress to pass these strong credit card safeguards to help ensure credit card consumers get a fair deal.”

President Obama called on the House to strengthen HR 627 by supporting amendments that: 

  • Require card issuers to get permission before charging consumers a fee for exceeding their limit

  • Require banks to apply payments first to balances with the highest interest rate.

  • Require card companies to disclose on monthly statements how long it will take to pay off a balance when making only minimum payments, and highlighting how much more the consumer will pay in fees and interest when doing so. 

  • Require any low-interest teaser rate to be offered for at least six months.

  • Require standardized bill due dates so they are the same every month.

  • HR 627 already includes important protections for consumers, including prohibiting card issuers from imposing new, higher interest rates retroactively to existing balances

  • Requiring 45-day notice of any rate increase

  • Prohibiting universal default — when the card company raises interest rates on a consumer who was late in making a payment to a different creditor

  • Prohibiting double-cycle billing

Publication date 04/29/09

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