From NBC's Lisa Myers and Kelly Paice
The House passed legislation today imposing regulations on banks earlier than expected in order to protect the consumer and stop banks from raising credit card interest rates to astronomical percentages.
Earlier this year, President Obama signed the Credit Card Accountability Responsibility and Disclosure Act of 2009, which enforces strict rules for credit card companies -- in particular, outlawing retroactive rate increases on credit card balances and regulating fees.
These rules were set to go into effect Feb. 2010; however, House Democrats today expressed their disapproval of how banks have handled the interim period, with some calling it outright abuse. They called instead for those regulations to now take effect Dec. 1. The bill was approved, 331-92.
House Financial Services Chairman Barney Frank (D-MA) expressed his upset over the banks' actions. "They have retained the right unilaterally and retroactively to raise the interest rate on what you already owe them. It is the single unfairest economic transaction I can think of that doesn't involve a pistol!" But banks suggest that the hiked rates are fair due to the economic state of the country, and say that they will not be able to comply with the earlier effective date set by the House.
Furthermore, on the House floor today, Rep. Virginia Foxx (R-NC) said, "Let's get real... This bill is just a time consumer because the Democrats have no real legislation to offer. They know this bill can't go into effect by December, but they need something to keep us here this week because they are trying to twist arms to get the votes for the health care bill."