White House opposes credit card holders bill of rights
WASHINGTON (Reuters) - The White House said on Monday it opposes legislation called “the Credit Cardholders’ Bill of Rights” that would curb unfair and deceptive credit card practices, saying it would constrain banks’ ability to price risk.
The White House said in a statement the bill would lead to less access to credit and higher interest rates for consumers.
"For the credit market to operate efficiently, creditors must have the flexibility to react to changes in customer risk and market conditions," the White House said.
The full House is expected to pass the bill, but similar legislation is not expected to progress in the Senate due to preoccupation with the financial crisis and U.S. presidential election.
The bill, chiefly sponsored by New York Democrat Carolyn Maloney, is similar to proposed regulations the Federal Reserve is reviewing and expected to finalize later this year.
Banks, reeling from the collapse of the U.S. housing and subprime mortgage markets and subsequent credit crisis, oppose the bill, which could limit their credit card revenue.
The bill would end double-cycle billing, in which card companies reach back to prior billing cycles to help calculate the interest charged in the current cycle.
