Credit Cardholders' Bill of Rights survives key vote

When the Federal Reserve asked for comments on its proposed rules on abusive credit card practices, an astonishing 56,000 poured in.

Most were from outraged consumers.

They told of interest rates skyrocketing when they paid an unrelated bill late. They complained of unwarranted late fees and pushed-up due dates. One Pennsylvania customer fumed: "I'm fed up with credit card company tricks that drive us deeper in debt."

This anguished deluge should send a clear message to leaders in Washington. The Federal Reserve should swiftly adopt its proposed rules against unfair or deceptive credit card practices. But the real burden to curb these abuses falls on Congress.

For too long, members of Congress have shirked the responsibility to ensure fair lending to credit card customers and have listened more intently to the banking lobbyists. A low point came in 2005, when Congress passed a bankruptcy law that was badly tilted against borrowers. It gave extra protections to lenders against unscrupulous debtors. But it also made it much harder for people to declare bankruptcy, even when the economic crisis was caused by sickness or family tragedy.

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Credit Cardholder' Bill of Rights, a pro-consumer bill that would abolish unpopular credit card industry practices passed a key U.S. House committee test moving it toward a vote by the full House.

Largely along party lines, members of the House Financial Services Committee voted 39-27 in favor of the Credit Cardholders' Bill of Rights, which would limit interest rate hikes, fees, and billing and payment practices cited most often by consumers and credit card industry critics. Committee Democrats all voted for it; they were joined by just two Republicans.

Listen to Sarah Byrnes of AFFIL (American's for Fairness in Lending) and Ira Rheingold of NACA (National Association of Consumer Advocates who were our guests on SpotLight last week.