Earlier in 2009, Congress passed and President Obama signed legislation requiring several new credit card rules. These rules were designed to protect consumers against further large increases in credit card rates and “hidden” charges. Under the terms of that legislation, most of those new rules were scheduled to take effect between February and August of 2010.
Many in Congress subsequently expressed concern that some credit card companies had raised interest rates and decreased credit limits on many consumers in advance of the effective dates of the changes. In response, H.R. 3639 was developed. This bill moved the effective dates of certain of the new provisions established in the previously-enacted legislation from dates in 2010 to December 1, 2009. As with most other major bills, the House first had to approve a resolution or “rule” setting the terms for debating H.R. 3639. This was a vote on that rule.
Rep. Perlmutter (D-CO) was leading the effort in support of the rule for H.R. 3639. He first acknowledged that some of the changes in the previously-passed legislation would require significant time to implement, and that “many lenders have made an honest effort to come into compliance with these new rules.” He then noted that the actions of many other credit card issuers “highlight the need for protections under the (legislation) now more than ever . . . (I)t is in fairness that we require card issuers to act with the same level of responsibility and accountability. H.R. 3639 would accelerate the implementation of certain provisions in existing law related to regulations and operations of the credit card companies. (It) has set deadlines for implementing various reforms and procedures, with most of those measures scheduled to take effect in February and in August of 2010. This bill would move those effective dates forward to December 1, 2009. American consumers don't need protection next year. They need it now . . . .”
Rep. Foxx (R-NC) was leading the effort against the rule. She first said the rule “provides for the consideration of a wholly unnecessary and potentially destructive bill that could further aggravate the struggles of small businesses and families who are suffering from an unavailability of credit during these times of economic uncertainty.”
Foxx then noted that she had opposed the previously-passed legislation “because it was based on the idea that individual card holders should not be allowed to make their own choices and should not take responsibility for their financial situations.”
Foxx went on to point to what she said would be “the consequences these new restrictions will have on financially vulnerable populations . . . .” Foxx said that advocates of this legislation “have failed to understand . . . that these changes will dramatically raise the costs of extending loans to cardholders and will cause the riskiest cardholders to be dropped all together, and that will hurt people in the urban community--and minorities most--because their income is lower than average . . . .” She concluded that “. . . minorities, women and working class families with good records of paying their debts will see credit access dry up.”
The rule was approved by a vote of 234-175. Two hundred and thirty-three Democrats and one Republican voted “aye”. One hundred and sixty-nine Republicans and six Democrats voted “nay”. As a result, the House was able to begin debate on the bill moving up the date for certain new consumer protections for credit card holders.