What: All Issues : Aid to Less Advantaged People, at Home & Abroad : America's Poor : H.R. 2622. Credit Reporting/Vote to Prevent Credit Card Companies from Raising Interest Rates on Cardholders Who Pay Their Bills on Time. (2003 house Roll Call 495)
 Who: All Members : New York, District 2 : King, Pete
[POW!]
 
H.R. 2622. Credit Reporting/Vote to Prevent Credit Card Companies from Raising Interest Rates on Cardholders Who Pay Their Bills on Time.
house Roll Call 495     Sep 10, 2003
Member's Vote
(progressive
or not)
Progressive Position
Progressive Result
(win or loss)

In 1996, Congress passed legislation known as the Fair Credit Reporting Act which, among other things, imposed federal regulations on the credit reporting industry and mandated uniform credit reporting standards across states. States, then, were preempted by the 1996 law from enacting either more or less stringent credit reporting measures than those required by the federal government. Provisions in the 1996 law, and specifically those mandating uniform credit reporting standards for states, were due to expire on January 1, 2004. In an effort to extend the 1996 law into the future, Republican leaders brought credit reporting legislation to the House floor for debate. During House consideration of the measure, Congressman Sanders (I-VT) offered an amendment which would have prevented credit card companies from raising the interest rates of those cardholders who pay their bills on time. Currently, credit card companies are allowed to increase interest rates on an individual's credit card if any of the following conditions obtain: 1) the cardholder makes a late payment on another credit card or a student loan; 2) the cardholder's credit score is lowered; 3) or the cardholder obtains a new mortgage or loan to pay for a house, car, or medical emergency. This list, it should be noted, is not exclusive; credit card companies can increase their rates for just about any reason so long as consumers are provided a 30 day notice of the change in their policy. Progressives voted in favor of Sander's amendment because, in their view, consumers should not be subjected to credit card rate hikes unless they fail to pay their credit card bill on time. Credit activity not directly related to an individual's payments on their credit card, Progressives argued, should not be used by credit card companies-the big three being Chase Manhattan, Citigroup, and Bank One-to increase interest rates. Conservatives opposed Sanders's amendment because, in their view, the additional credit information collected from consumers and used by credit card companies helps those companies determine the proper amount of risk they face from each cardholder (interest rates can be viewed as a calculation of risk). During debate on the Sanders's amendment, Conservatives relied on testimony by Federal Reserve Chairman Alan Greenspan to make their case. In Greenspan's words: "The information gathered by credit reporting companies on the borrowing and payment experiences of consumers is a cornerstone of the consumer credit system in this country. Experience indicates that access to the information assembled by these companies and credit evaluation systems based on that information have improved the overall quality and reduced the cost of credit decisions while expanding the availability of credit." On a vote of 142-272, the Sanders amendment was struck down and the proposed restrictions on interest rate increases based on credit activity not directly related to an individual's payments on his or her credit card were not included in the underlying credit reporting legislation.

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Issue Areas:
Key: Y=Yea, N=Nay, W=Win, L=Loss