Washington, D.C.— Senator John D. (Jay) Rockefeller IV, hailed the passage of the Credit Card Accountability, Responsibility and Disclosure Act. The legislation passed in the U.S. Senate by a vote of 90 to 5.
Senator Rockefeller is deeply committed to protecting American consumers. As Chairman of the Senate Commerce, Science and Transportation Committee, Rockefeller held his first hearing as Chairman on protecting vulnerable consumers from homeowner fraud.
“It is time for credit card companies to stop ripping off consumers by hiding their fees and practices in term sheets that are impossible to understand. Credit card companies must be stopped from using deceptive practices that push American families further into debt. By making credit cards and interest rates more complicated than they need to be, credit card companies have reaped profits from consumers paying more than they should have to – this must stop,” said Senator Rockefeller.
“This legislation puts consumers first, forbids abusive fees and penalties and forces credit card companies to be more clear and forthcoming in their paperwork,” said Senator Rockefeller.
Background on the Credit Card Accountability, Responsibility, and Disclosure Act
The legislation will:
• Get rid of hiding items in the fine print by requiring greater disclosure of rates, terms and billing details by credit card companies.
• Protect consumers from arbitrary interest rate hikes and unfair and abusive fee and finance charge increases.
• Prohibit universal default on existing balances, which involves credit card companies raising interest rates on customers who have a perfect record with the credit card, but miss a payment with any other creditor.
• Prohibit interest charges on paid-off balances from previous billing cycles (also known as a double-cycle billing ban).
• Require payments to be applied first to the credit card balance with the highest interest rate, so families can forge a meaningful path out of debt.
• Protect students and other young consumers from aggressive credit card solicitations, particularly at a time that colleges lose more students to credit card debt than to academic failure.
• Establish tougher penalties for companies that violate the law.