Two members of Congress plan to introduce a bill Thursday that would speed up the implementation of a law restricting the ability of credit card companies to raise interest rates and fees.
Rep. Carolyn B. Maloney (D-N.Y.), chairman of the Joint Economic Committee, and Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, are seeking to move the effective date of the credit card law to Dec. 1 from Feb. 1.
Signed into law in May, the Credit Card Accountability, Responsibility and Disclosure Act forbids card companies from raising interest rates on existing balances unless a borrower is at least 60 days late. If the cardholder pays on time for the next six months, the company would have to restore the original rate.
Consumer advocates welcomed the bill as a landmark reform but complained that it would not take effect until February. Since the law was passed, several card companies have raised interest rates and fees, sparking outrage on Capitol Hill.
Maloney said that since the bill was signed, "too many" card companies have been "taking advantage and using the time before the effective date badly. Changing the effective date to December 1 is both warranted and wise."
The industry has argued that making such sweeping changes takes time, according to The Washington Post's report.