Almost lost in all the commotion over the financial crisis legislation, the Credit Cardholders’ Bill of Rights Act sailed through the House on September 23 by a vote of 312-112.

The Senate is not likely to take up the bill this year.

Nevertheless, the bill’s relatively easy passage despite White House opposition and the fact that the Federal Reserve has already proposed tough new credit card regulatory provisions suggests the banking industry will have to cope with a much more pro-regulatory environment for the foreseeable future.

The House credit card bill would restrict upfront fees, interest-rate increases on existing balances, steering payments to card balances with lower interest rates, and charging late fees on payments mailed at least a week before the due date.

Industry Response

“Amid the financial turmoil on Wall Street, today the House took steps to help those on

Main Street,” said Rep. Carolyn Maloney (D-N.Y.), the bill’s author and one of its main sponsors. “This historic legislation will help working families who face their own credit crunch as a result of what the Federal Reserve itself calls ‘unfair,’ ‘deceptive’ and ‘anticompetitive’ credit-card practices.”

Edward Yingling, American Bankers Association president and CEO, said the bill comes with a high price tag. “The so-called ‘Credit Cardholders’ Bill of Rights’ (H.R. 5244), while well-intentioned, will increase the cost of credit for consumers and small businesses across the country, result in less access to credit for consumers and businesses alike, and may further roil the securities markets — all at a time when our economy can least afford it,” Yingling said.

“Legislation resulting in higher prices to consumers makes little sense at any time, let alone when global markets face the degree of turmoil that confronts them today. By limiting their ability to manage risk in making loans, this bill will force lenders to increase prices for everyone to compensate for that added risk. That’s unfair.”