McClintock votes against Credit Cardholders Bill of Rights bill

  Rep. Tom McClintock, whose Northern California district includes western Nevada County, was one of 92 lawmakers who voted Wednesday against the immediate implementation of the Credit Cardholders Bill of Rights.

The measure passed with 331 votes, which included the support of 83 Republicans. The bill, H.R. 5244, is designed to stop the nation’s largest credit card companies from unfair or arbitrary rate hikes and fees and from double-cycle billing.

 It bars credit card companies from issuing credit cards to those younger than 18, gives credit card users at least 25 days to pay their monthly bill and prohibits credit card companies from charging late fees for payments that reach them before 5 p.m. of the due date.

  The bill amends earlier legislation that would have implemented the Credit Cardholders Bill of Rights in 2010. Since that bill was passed earlier this year, credit card companies have been raising interest rates for millions of Americans to as high as 29.99 percent, sparking outrage among consumers nationwide.

  McClintock was elected in November to represent the 4^th Congressional District although he does not live in the district, which stretches from Placer County to Modoc County and includes all of Nevada County.

 The Southern California lawmaker said he would move into the district if he won the election.  When interviewed in September in Grass Valley, McClintock told the Nevada City Advocate that his home in Elk Grove “is upside down” and that he couldn’t move until that was corrected.

  More detailed information about the legislation follows.

 H.R. 3639: Expedited CARD Reform for Consumers Act of 2009

To amend the Credit Card Accountability Responsibility and Disclosure Act of 2009 to establish an earlier effective date for various consumer protections, and for other purposes.

Credit Cardholders' Bill of Rights Act of 2008 - (Sec. 2) Amends the Truth in Lending Act to prohibit a creditor from increasing any annual percentage rate of interest (APR) applicable to the existing balance on an open end consumer credit card account unless specified conditions are met.

Prescribes the treatment of existing balances following a rate increase.

Allows a creditor to increase an APR on the existing credit card balance only if the increase is due solely to: (1) the operation of an index not under the creditor's control and available to the general public; (2) expiration of a promotional rate, or loss of a promotional rate for a reason specified in the account agreement (e.g., late payment); or (3) the consumer's minimum payment has not been received within 30 days after its due date.

Requires a 45-day advance notice of credit card account rate increases.

(Sec. 3) Prohibits imposition of a finance charge, with certain exceptions, upon a credit card account balance that is based on balances for days in billing cycles preceding the most recent billing cycle (double cycle billing).

Prohibits the imposition of a fee on an outstanding credit card balance, at the end of a billing period, that is attributable only to interest accrued during the preceding billing period on an outstanding balance fully repaid during that preceding billing period. Declares that any failure to make timely repayments of such a balance shall not constitute a default on the account.

Requires each periodic statement of account to provide the telephone number, Internet address, and website at which the payoff balance may be requested.

Grants a consumer the right to reject a new credit card before the creditor notifies a consumer reporting agency of its corresponding account.

Details mandatory pro rata payment allocations by a creditor where an outstanding balance accrues interest at two or more different APRs.

Sets forth special rules for accounts with promotional rate balances or deferred interest balances.

Prohibits a creditor from denying a cardholder a specified payment grace period if the cardholder takes advantage of a promotional rate balance or deferred interest rate balance.

Requires creditors to send a periodic credit card statement of account to the consumer at least 25 calendar days before the due date for the next payment on the outstanding balance.

(Sec. 4) Authorizes a consumer to opt-out of creditor authorization of over-the-limit transactions if fees are imposed.

Limits any imposition of an over-the-limit fee to once per billing cycle.

Prohibits imposition of any over-the-limit fee if the credit limit was exceeded due to a credit hold, unless the actual amount of the transaction for which the hold was placed would have resulted in the consumer's exceeding such credit limit.

(Sec. 5) Prescribes the contents of credit card price and availability information which the Board of Governors of the Federal Reserve System (Board) must collect and make public semiannually.

Requires the Board to report to Congress annually on estimates of the approximate, relative percentage of income derived by the credit card operations of depository institutions from designated sources, including interest rates and fees imposed upon cardholders.

(Sec. 6) Prescribes a standard for the initial issuance of subprime or "fee harvester" cards (accounts requiring first-year fee payments in excess of 25% of the total amount of credit authorized).

Prohibits payment of any such fees (other than late fees or over-the-limit fees) from the credit made available by the card.

(Sec. 7) Prohibits extensions of credit to consumers under age 18, unless they are emancipated under state law.

(Sec. 8) Requires the Board to prescribe regulations implementing this Act within six months after its enactment.

Expresses the sense of Congress that no provision of this Act should impede the promulgation of final regulations under laws in effect on the day before the date of enactment. States that such regulations should: (1) be prescribed in final form on or before December 31, 2008; and (2) apply to credit card transactions after the 30-day period following issuance in final form.