WASHINGTON WASHINGTON — In one of this year's few bipartisan success stories on Capitol Hill, the Senate on Tuesday overwhelmingly passed a landmark bill that would impose an unprecedented set of restrictions on the credit card industry's ability to raise interest rates and take other actions that have angered consumers.
The measure, approved on a 90-5 vote, would curtail retroactive interest rate increases, require advance notice of rate increases, restrict fees for making charges over one's credit limit, and prohibit lenders from raising rates when a cardholder is late on a separate debt.
It would also make it more difficult for companies to solicit college-age students to obtain credit cards, prevent companies from charging a fee for paying a bill, and prohibit interest charges for debts paid on time.
Consumer advocates were ecstatic. "It has taken 10 years to get to this point," said Pamela Banks, senior policy counsel with Consumers Union. "I think consumers can breathe a sigh of relief."
The House, which passed a similar measure last month, is expected to approve the Senate version today. President Obama, who had called for such legislation, is expected to sign it.
In a contentious year on Capitol Hill, Democrats and Republicans found it easy to come together against banks and other credit card firms, which historically have wielded enormous clout in Washington.
In the wake of consumer outrage over the financial crisis and subsequent bailout of the banking industry, card companies found themselves the targets of blistering attacks from senators who accused them of engaging in exploitative and misleading tactics.
"Republicans and Democrats have heard the same stories from consumers," said Sen. Lindsey Graham (R-S.C.), who voted for the bill.
"The credit card companies have crossed line after line," Sen. Charles E. Schumer (D-N.Y.) said during the Senate's debate on the measure.
The industry has said the bill, which it fought, would force card issuers to recoup lost revenue by raising annual fees and doing away with perks such as airline miles and "cash-back" rewards.
"Those who manage their credit well will be subsidizing those who don't," said Scott Talbott, a lobbyist for the Financial Services Roundtable, an industry trade group.
The industry also has said the legislation would tighten the amount of credit available to consumers via their cards.
