Senate Credit Card Debate Has Begun

The Senate debate over credit cards officially began last night, and this morning Senators Dodd, Levin, Menendez, and Merkley held a press conference about S. 414, the Credit CARD Act.  At the conference, Senator Dodd touted the agreement he reached with Senator Shelby, who is the ranking Republican member of the Banking Committee.  (Senator Dodd, a Democrat, is the Chair.)  Because these two worked out a compromise on the bill, it is likely to pass the Senate when they vote tomorrow or Thursday.

From PIRG’s Consumer Blog by Ed Mierzwinski, here’s the consumer take on the Senate compromise:

• The Dodd bill now has a limited exception allowing banks to raise rates only after you are at least 60 days late. The House bill and Federal Reserve rule allow rate increases after you are only 30 days late. Dodd-Shelby protects more people who might inadvertently make one late payment.
• Dodd-Shelby has a stronger youth marketing provision. It applies to all youth between 18-21. The House bill applies only to fulltime students between 18-21.
• The Dodd bill has a roadmap to escape punitive penalty rates after six months of good payments.
• The Dodd bill takes effect 9 months after passage. The House bill takes effect one year after passage, or on the date the Fed rule takes effect, July 2010, whichever is first.

We like the House bill. But we like the Senate bill more.

For more details about how S. 414 would protect you, see this great post from Consumers Union’s Defend Your Dollars.