by Jessica Holzer
posted by Greg Lipinski
Legislation to impose sweeping new restrictions on the credit-card industry cleared a key hurdle Thursday when it passed a U.S. House subcommittee.
The legislation would put into federal statute new restrictions on credit-card rules that the Federal Reserve adopted late last year, making them more difficult to change in the future. It would also go further than the Fed in some areas by banning the marketing of credit cards to minors and allowing consumers to set their own lower credit limits.
A bill addressing many of the same credit-card practices was approved by the Senate Banking Committee on Tuesday.
The House measure, which must be approved by the full Financial Services Committee before it moves to the House floor, would restrict card companies' ability to raise rates on existing customers and ban certain controversial practices, such as applying payments to the portion of a borrower's balance with the lowest interest rate. It would also prohibit issuers from charging interest on parts of the balance that were already paid on time, a practice known as double-cycle billing.
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