U.S. Sen. Jon Tester is supporting legislation that would protect customers against predatory practices used by some credit card companies. 

“Credit cards are a fact of life in this society, and it’s so very, very easy for people to get in trouble with them,” the Montana Democrat said in an interview with the Kaimin last Friday.

The Senate Banking Committee approved the Credit Card Accountability Responsibility and Disclosure Act at the end of March. The act prevents credit card companies from imposing interest charges on those who pay their debt on time, adds a week to the amount of time customers have to pay their bills, prohibits companies from charging interest on late and over-limit fees, and requires that companies give customers notice of any interest rate increase 45 days in advance.

The legislation also requires that credit card applicants under the age of 21, who are especially vulnerable to the techniques of some companies, get a signature from a parent or someone willing to take responsibility for the debt when applying for a credit card.

“It’ll make a big difference for everyone in society, including college students,” Tester said.
He said credit card companies tend to target younger adults without realizing that many of them, especially college students, have so much financial obligation that it can be hard to make payments. He said when students are preoccupied with grades and getting to class, they sometimes forget to make payments.

Tester said that when customers miss payments and have to pay additional fees and interest rates as a result, their debt compounds to make their lives “miserable.”

“All I’m asking for is some accountability from the credit card industry,” he said.

The act, written by Senate Banking Committee Chairman Chris Dodd, passed the committee with one-sided support from Democrats, but Tester said he still thinks it could eventually pass through Congress after it is negotiated. However, he said that with Congress needing to deal with big issues like the wars in Iraq and Afghanistan, climate change and the economic crisis, the credit card act might not necessarily make it on to the agenda.

“Hopefully we can get floor time on it before the August break,” he said.

Tester said the same is true for the Employee Free Choice Act, legislation that would make it easier for employees to join unions. The University of Montana group Students for Economic and Social Justice has rallied in favor of the act on campus the past week.

Tester said he hasn’t read much of the legislation because he’s not on the committee that deals with labor issues but said he would look into it more if it ends up going to the Senate floor.

“I’ve been lobbied on it by my friends from the union movement and my friends from the business community, and both are passionate about it — for and against,” he said.