Senate Armed Services Committee Chairman Carl Levin applauded the Senate Banking, Housing and Urban Affairs Committee for favorably reporting to the full Senate Tuesday legislation for credit card reform.
The legislation, which now heads for a full vote in the Senate, will prohibit credit card issuers from increasing interest rates on cardholders in good standing for reasons unrelated to the cardholder's behavior with respect to the affected credit card.
It would also prohibit interest charges on any portion of a credit card debt which the card holder paid on time during a grace period.
Further, the legislation would require 45-day notice to impose a higher interest rate as well as require higher interest rates to apply only to future credit card debt, and not retroactively to debt incurred prior to the increase.
In his statement, Levin said the new bill would put an end to abusive practices such as applying higher interest rates retroactively to existing credit card debt, hiking interest rates on customers who pay on time, and collecting interest on credit card debts that were repaid on time.
This landmark bill, Levin continued, the first major credit card legislation ever passed by the Banking Committee, is the strongest credit card reform legislation in Congress, and its immediate enactment would be one of the best ways Congress can help struggling families.
Levin called on Congress to vote on the bill as soon as possible.
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