Wednesday, the U.S. House of Representatives approved H.R. 627, the Credit Cardholders’ Bill of Rights, as it was adopted by the U.S. Senate on Tuesday.  The bill now awaits President Obama's signature to become law.  The bill is more stringent on issuers than the new credit card rules issued by the Federal Reserve in December.  While the Fed rules were scheduled to take effect in July 2010, many rules in this bill will take effect nine months after enactment.

Thanks in part to the grassroots efforts of ETA members and the broader work of the Electronic Payments Coalition (EPC), there were no interchange amendments added to the bill.  ETA members responded enthusiastically to the call to urge Senators to not include interchange in the credit card bill.  It is also understood that the interchange debate is not finished and will rise again in Congress this year.

The legislation will, among other things, prohibit card companies from raising interest rates on existing balances unless the borrower is at least 60 days late paying a bill. If the cardholder pays on time for the following six months, the company would have to restore the original rate. On cards with more than one interest rate, issuers will have to apply payments first to the debts with the highest rates. Before increasing rates on future purchases, the card company would have to give cardholders 45 days' notice.

Card executives have said the changes would prevent them from properly distinguishing between risky and non-risky borrowers and force them to charge everyone higher rates and annual fees.

Four provisions of the bill will interest ETA members, they are:  a government study of interchange, new gift card rules, stored value regulations, and creation of a Small Business Information Security Task Force.