Credit card proposal may get vote in Congress

Deepening economic distress and concern over consumer debt could help legislation that would overhaul practices of credit card companies get voted on in Congress as lawmakers return this week from summer recess.

In the waning weeks of this Democratic-controlled Congress, with lawmakers looking to show consumer-friendly results to voters before the November election, there could be momentum for the credit card legislation _ more likely in the House than the Senate, backers of the proposal say.

"It's a sign that the lock that the credit card industry has had on Congress is loosening," said Travis Plunkett, legislative director for Consumer Federation of America. "I think there's a very good chance it will pass the House this month."

Yet some congressional aides say chances remain slim of passage in the short time remaining in the session, and that a bill may have to await the new year and new Congress.

The legislation has drawn the strong support of consumer groups and vigorous opposition by the banking industry.

Amid the stumbling economy, many consumers are using credit cards to pay the higher costs of groceries and gasoline, and Americans now are weighed down by about $900 billion in credit card debt, according to Federal Reserve figures.

A bill authored by Rep. Carolyn Maloney, D-N.Y., cleared the House Financial Services Committee in July and pointed toward the floor of the House. It would, among other things, require credit card issuers to give account holders 45 days notice of any increases in interest rates. Monthly bills would have to be mailed at least 25 days before the due date, up from the current minimum of 14 days, and fees could not be charged on the remaining interest-only balance of a customer who has paid their bill on time.

A similar yet more stringent Senate proposal, by Sens. Carl Levin, D-Mich., and Banking Committee Chairman Christopher Dodd, D-Conn., faces dimmer prospects because of the slimmer Democratic majority in that body.

No committee hearings in the Senate, nor votes in either chamber have yet been scheduled.

Industry critics maintain that credit card issuers' practices are abusive and confusing for consumers and can push them deeper into debt.

The industry's response: If customers are unhappy with the rates or terms and conditions of their credit card, there are thousands of other card issuers that would be glad to have their business.

Five big financial companies _ Discover Financial Services LLC, Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Capital One Financial Corp. _ issue around 80 percent of all U.S. credit cards, according to congressional investigators.

The financial institutions fiercely compete with each other and more than 6,000 other institutions that issue credit cards, the American Bankers Association says.