Tester, Baucus join in passing credit card bill

HELENA – Responding to numerous complaints from Montanans, U.S. Sens. Jon Tester and Max Baucus voted Tuesday to impose far-reaching restrictions on credit card companies, while Rep. Denny Rehberg did so last month.

The Senate passed its bill 90-5, while the House endorsed its version 357-70 on April 30.

Now the two chambers must work out their differences in the bills to send legislation to President Barack Obama to sign. Obama has said he wants the bill on his desk by Memorial Day, which is Monday.

"It's a big deal," said Tester, a Democrat who helped write the Senate bill as a member of the Banking Committee. "We've been working hard on this for over a year. It's the biggest credit card reform bill that's been written in this country."

Tester called the bill common-sense legislation.

"It's a response to a whole stack of letters from Montanans," he said in a telephone interview. "The biggest complaint is credit card companies just arbitrarily raising interest rates on people."

Baucus, also a Democrat, praised Tester for his leadership on the bill and "for really going to bat for hardworking Montana families."

"This is a good bill and it will really help folks during these tough economic times," Baucus said.

Rehberg said credit card company practices have been one of the most common consumer complaints his office receives from Montanans.

"It's time to stop punishing consumers for the deceptive and unfair practices of some major credit card providers," Rehberg said in a statement. "This bill looks out for their interests. While folks have no problem paying interest and fees that are fairly assessed, the current system has not been fair."

The bill would require credit card companies to make major changes in how they conduct business, including banning certain fees, These include not raising interest rates on cardholders who pay their bills on time and not increasing rates, fees or finance charges on current balances.

It would require credit card statements to be mailed 21 days before a bill is due, instead of the current 14 days, and prohibit companies from setting early-morning deadlines for credit card payments.

The bill would make it harder for companies to issue credit cards to people under age 21 by requiring minors to have signatures of parents, guardians or other adults who accept responsibility of paying any debts.

Credit card companies would have to give customers 45 days notice of any changes in interest rates, fees and finance charge increases. They couldn't raise rates on customers for at least a year after they open accounts. Any promotional interest rates would have to last at least six months.

The bill would require plastic gift cards to be valid for at least five years.

Americans owe more than $950 billion in credit card debt, Tester said. Seventy-three percent of American families have credit cards, with an average balance of $7,300, he said.