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Credit card reform
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05/14/09 01:34 PM ET
Members of Congress have been trying to move credit card reform for years, but until recently, the legislative obstacles were too great to overcome.
But the politics of the debate have changed dramatically over the past year. President Obama has repeatedly called on Congress to pass credit card reform despite significant concerns from major players in the financial sector.
Those players are not as powerful as they used to be. While major banks still have the clout to derail measures such as cramdown of mortgage payments, they have not been able to slow down the legislative locomotive of credit card reform.
The House earlier this year passed its version on a 357-70 vote, but the Senate is poised to move a still tougher bill sponsored by Senate Banking Committee Chairman Chris Dodd (D-Conn.).
Dodd has struck a deal with Sen. Richard Shelby (R-Ala.), ranking member on the panel. Shelby is a shrewd negotiator and didn’t cave to Dodd. But he and other Republicans did not want to stand in the way of a popular bill.
The financial sector supports the House bill over the Senate measure, but the bad news for industry lobbyists is that the upper chamber version is going to take the lead once it passes.
Senate Majority Leader Harry Reid (D-Nev.) this week said the House bill is good, but the Senate measure is better.
In an unusual twist, the House agrees.
Reid filed cloture on the bill on Wednesday, and it is expected to pass next week. The House is then expected to take up the Senate bill.
Under the Senate bill, credit card companies could not increase interest rates on a cardholder unless he or she is 60 days late on payments. The House bill calls for a 30-day provision.
The Senate bill also requires companies to bring interest rates back down if a cardholder hits his or her payments for six months after being 60 days late. That provision isn’t in the House bill.
Regardless, the expected passage of credit card reform will be a huge win for Rep. Carolyn Maloney (D-N.Y.), who has led on this issue for years.
It could also be a boon for Dodd, who is facing an uphill reelection battle next year. Dodd is likely to tout the bill on the campaign trail as he seeks to regain his footing.
Credit card reform used to die year after year, but in the new Congress, it is sailing through — proof that when the tide turns, legislation that had beached can make quick headway.
But the politics of the debate have changed dramatically over the past year. President Obama has repeatedly called on Congress to pass credit card reform despite significant concerns from major players in the financial sector.
The House earlier this year passed its version on a 357-70 vote, but the Senate is poised to move a still tougher bill sponsored by Senate Banking Committee Chairman Chris Dodd (D-Conn.).
Dodd has struck a deal with Sen. Richard Shelby (R-Ala.), ranking member on the panel. Shelby is a shrewd negotiator and didn’t cave to Dodd. But he and other Republicans did not want to stand in the way of a popular bill.
The financial sector supports the House bill over the Senate measure, but the bad news for industry lobbyists is that the upper chamber version is going to take the lead once it passes.
Senate Majority Leader Harry Reid (D-Nev.) this week said the House bill is good, but the Senate measure is better.
In an unusual twist, the House agrees.
Reid filed cloture on the bill on Wednesday, and it is expected to pass next week. The House is then expected to take up the Senate bill.
Under the Senate bill, credit card companies could not increase interest rates on a cardholder unless he or she is 60 days late on payments. The House bill calls for a 30-day provision.
The Senate bill also requires companies to bring interest rates back down if a cardholder hits his or her payments for six months after being 60 days late. That provision isn’t in the House bill.
Regardless, the expected passage of credit card reform will be a huge win for Rep. Carolyn Maloney (D-N.Y.), who has led on this issue for years.
It could also be a boon for Dodd, who is facing an uphill reelection battle next year. Dodd is likely to tout the bill on the campaign trail as he seeks to regain his footing.
Credit card reform used to die year after year, but in the new Congress, it is sailing through — proof that when the tide turns, legislation that had beached can make quick headway.
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