Tester: Credit card overhaul will protect Montanans
Senator says reform will bring honesty and fairness back to credit card industry
(WASHINGTON, D.C.) – Saying it will protect Montanans from abuse, bad business and overwhelming debt, Senator Jon Tester today threw his support behind a major overhaul of the credit card industry.
Tester today joined Senate Banking Committee Chairman Chris Dodd, D-Conn., to introduce the Credit Card Accountability, Responsibility and Disclosure (CARD) Act.
"This legislation protects folks from abusive credit card shenanigans and it will keep more Montanans from being saddled with overwhelming debt," Tester said. "It will bring honesty and fairness back to the credit card industry. With food prices high and gas prices high, this bill will add some common sense to the credit card equation."
Tester specifically praised the Credit CARD Act because it stops credit card companies from jacking up interest rates on accounts that are in good standing. Last year Tester introduced separate legislation to end the practice, which credit companies call "universal default" or "risk-based re-pricing" in fine print.
"No matter what you call it, it's bad business, it's unfair, and it sneaks up on a lot of folks who work hard to pay their bills on time," Tester said. "Montanans believe in personal responsibility, but they also believe in straightforward, common-sense business practices."
The Credit CARD Act also:
- Prevents credit card companies from changing a terms of a contract during the period of the agreement.
- Requires interest rate increases to apply only to future credit card debt.
- Prohibits interest changes on debt paid on time (called double-cycle billing).
- Requires credit card companies to mail statements three weeks before a bill is due instead of the current 14 days.
- Prohibits credit card companies from charging fees for customers who pay bills via phone or the internet.
The Credit CARD Act also requires companies to get a signature from a parent or guardian before issuing a credit card to anyone under age 21. Many credit card companies have targeted younger customers who may be unfamiliar with the responsibilities of owning a credit card.
"This bill is a great start to Congress finally passing credit card reform," Tester said. "It's past time to clean up the process and bring honest business back to the credit card industry."