Bill Could Limit Credit Account Charges

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Rep. Lucille Roybal-Allard, D-CA, has reintroduced legislation that would limit the fees and interest charges that banks, catalogers and other credit grantors could charge their customers.


Roybal-Allard said the bill -- H.R. 2032, the Credit Card Consumer Protection Act -- is designed to protect consumers against "increasingly unreasonable practices by credit card companies, such as low 'teaser' rates, unfair fees and penalties and high-interest 'convenience checks.' "


The bill would amend the Truth in Lending Act by prohibiting firms from charging a fee to credit cardholders with open-end consumer credit for taking payment on time or paying off an account.


Roybal-Allard had introduced the legislation in the previous congressional session, but it never made it out of committee.


If the legislation is passed, credit card issuers would be required to display prominently on a consumer's billing statement the last full business day by which payment must be received before the imposition of late fees or additional finance charges. In addition, consumers would receive a conspicuous notice that the failure to pay in sufficient time for it to be processed by such date may result in substantial late fees or additional finance charges.


Companies also would be required to give consumers at least 15 days' notice before the next payment due date about any planned changes in the interest rate charged on the outstanding balance of a credit account.


Credit grantors that use direct mail solicitations to offer a low introductory interest rate would be required to provide consumers with conspicuous, detailed explanations about the length of introductory rates as well as when and how they would increase to the credit grantor's customary interest rate.


Roybal-Allard also reintroduced the Consumer Credit Report Accuracy and Privacy Act of 2001, which would allow consumers to receive a free credit report annually from any consumer reporting agency. This bill also failed to make it out of committee in the last congressional session.


The House Banking Committee is reviewing both measures, each of which has 17 co-sponsors.


Both bills had been introduced in the last session of Congress, but the House did not act on either. Thus, they had to be reintroduced when a new congressional session began in January.


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