Senate Banking Committee Approves S. 414!

Yesterday, March 31, the Senate Committee on Banking, Housing, and Urban Affairs approved the Credit CARD Act by a vote of 12 – 11.  S. 414 will now face a full Senate vote, possibly later in the spring.  The vote was largely along party lines, with Democrats approving and Republicans opposing.  The exception was Democrat Tim Johnson of South Dakota, who voted against the bill.

South Dakota is home to many credit card companies, and Johnson cited concern about industry jobs as part of his rationale for voting against the bill.  He is also one of the largest recipients of donations from finance/credit companies, according to OpenSecrets.org.  The banking industry strongly opposes the Credit CARD Act, and also opposes the Credit Cardholders Bill of Rights (PDF) which the House Financial Services Committee will mark up today.

Consumers have recently managed to break the stranglehold banking interests previously held over the Senate Banking and House Financial Services Committees.  The Credit Cardholders Bill of Rights was passed by the House Financial Services Committee—and later by the full House—as H.R. 5422 last year, marking the first time in history that either chamber of Congress passed substantive reforms of the credit card industry.

The Credit CARD Act was approved by the Committee with a nine month implementation timeframe, much longer than the three months required by the current version of the House’s Credit Cardholders Bill of Rights.  If both bills make it through their respective chambers, a joint committee will have to hammer out a final implementation timeframe, as well as address protections included in S. 414 but not in H.R. 627.

The Federal Reserve Board’s regulations of the industry are set to go into effect in July of 2010, but AFFIL and other groups hope that Congressional action will give consumers relief more quickly.