Click here to see Udall Fighting for the bill's passage.
WASHINGTON
- U.S. Senator Tom Udall today applauded Senate passage of the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, by a vote of 90 to 5. The legislation Udall fought to pass seeks to stop several unfair or dishonest practices used by some credit card companies. It also requires greater disclosure of credit card terms and prevents card companies from raising rates unfairly or retroactively.
"This legislation is an important step towards protecting the millions of American children whose futures are compromised when their parents become victims of dishonest or unfair credit card company practices," said Udall. "In 2004, families with minor children were more than three times as likely to file for bankruptcy as their childless friends. More children lived through their parent's bankruptcy than their parent's divorce, and these children risk losing a stable home and a shot at college. Today's vote shows that the Senate can work in a bipartisan manner to protect American families."
Over the last three decades, as credit card companies have taken advantage of loose rules to aggressively market their product, credit card debt has gone up 360 percent and debt-related bankruptcies have skyrocketed. One study has shown that one-third of bankruptcies are caused by credit card debt.
Among other provisions, the CARD Act:
· Outlaws "universal default," a practice by which card companies raise interest rates on every one of a customer's accounts in response to a default on one account, even if that default is on an account with a different lender;
· Prevents arbitrary interest rate increases;
· Stops interest rate charges on debt that is paid on time;
· Requires a 45-day notice before an interest rate increase; and,
· Forces card companies to inform customers when card terms have changed and to reveal due dates and late payment penalties in a customer's billing statement.