A bill to amend the Truth in Lending Act requiring more disclosures in credit card solicitations has been introduced in the House by Rep. John LaFalce (D-NY).
LaFalce, the House Banking Committee’s senior Democrat, explained the need for the bill in a statement, saying that “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, HR-900 would prohibit credit card issuers which include direct marketers, catalogers, banks and other financial institutions and retailers, from mailing unsolicited cards with multiple purposes, such as telephone calling cards and debit cards, that also can be used to obtain credit.
It would also require credit card issuers 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 disclose the fees and interest charges relating to a cardholders 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 bill which is being reviewed by the House Banking and Financial Services Committee.
“The overall thrust of the bill looks fairly good, but we’re making a thorough look at it to see how it would affect direct marketers and catalogers,” said Richard A. Barton, the Direct Marketing Association’s senior vice president, Congressional matters.
