Credit Card Crackdown
A BILL TO AMEND the Truth in Lending Act to require more disclosures in credit card solicitations has been introduced in the U.S. House of Representatives by Rep. John LaFalce (D-NY).
LaFalce, the House Banking and Financial Services Committee’s senior Democrat, explained the need for the bill in a statement, saying “credit card issuers have increased the number and amount of fees, shortened payment periods and contrived hidden penalties that can readily double or triple interest charges.”
The measure, H.R. 900, would prohibit credit card issuers, including direct marketers, catalogers, retailers, and banks and other financial institutions, from mailing unsolicited cards with multiple purposes-such as telephone calling cards and debit cards-that also can be used to obtain credit.
The bill would also require credit card issuers to include information in a customer’s monthly statement about how long it would take cardholders to pay off the debt by making minimum payments on both principal and interest. Card issuers would also have to disclose the fees and interest charges relating to a cardholder’s use of convenience checks to pay third parties.
Internet solicitations for credit cards would have to include the disclosure of all terms and costs in “clear and conspicuous” language, according to the proposal, which is being reviewed by the House Banking and Financial Services Committee.
“The overall thrust of the bill looks fairly good, but we’re giving it a thorough look to see how it would affect direct marketers and catalogers,” said Direct Marketing Association senior vice president for congressional matters Richard A. Barton.
