This is surprising:
In a blow to financial firms, the U.S. Senate Banking Committee on Tuesday signed off on legislation that seeks to ban abusive credit-card practices.
While consumer groups and key Democrats lauded the committee’s move, the 12-to-11 vote in favor of the controversial bill was very narrow. Thus, the committee’s chairman, Sen. Christopher Dodd (D., Conn.), said he would work with lawmakers–both Democratic and Republican–to modify the bill and broaden support before the bill hits the Senate floor.
“My intent is to work things out and move forward. This was going to be difficult–I knew that,” Sen. Dodd told reporters after the vote. “This is the first step in a process.”
The bill seeks to prohibit card issuers from unfairly raising interest rates. It would prohibit applying rate increases retroactively to existing balances and it seeks to boost consumer disclosures. Additionally, it seeks to limit certain over-the-limit fees and interest charges and creates new requirements for card issuers looking to extend credit to youngsters under the age of 21. The amended bill would also make it easier for gift-card recipients to use the cards.
The bill probably doesn’t go far enough to rein in the abuses, so it will be interesting to see what the House does.