At first glance, the Credit Card Holders’ Bill of Rights seems to protect consumers, because it would ban retroactive rate hikes, double-cycle billing, misleading contract language and issuance to applicants under age 18.
But financial industry pundits don’t support all components of the bill because of what it could cost the banking industry.
The bill, H.R. 627, was passed last week by the House of Representatives. A similar version of the bill is pending a vote by the Senate and could be signed into law by Memorial Day.
It bans some credit card practices that were recently mandated by federal regulators, which community banks are working to implement, said Barbara Walker, executive director of Independent Bankers of Colorado.
One amendment would require small credit card issuers to maintain a variety of notification systems, including an online presence, a costly prospect for community banks.
“We supported an amendment that was unanimously passed during committee consideration, which would have specifically exempted small issuers from these kinds of requirements,” she said.
Walker also said that the association is concerned about amendments that would dictate credit card underwriting standards for students and harm customers who expect over-the-limit coverage.
“We hope the changes made by the House that add significant burdens to community banks can be remedied before any legislation is signed into law,” Walker said.