WASHINGTON, D.C. — The U.S. House overwhelmingly passed legislation Thursday that would restrict credit card practices and eliminate sudden retroactive hikes in interest rates and late fees, setting up a potential campaign liability for those who opposed it.
The measure, which Rep. Keith Ellison D-Minn. has championed since taking office in 2007, passed 357-70. All five of Minnesota’s House Democrats, plus 3rd District Republican Erik Paulsen, voted for the bill. President Barack Obama also supports the legislation.
Republican Reps. Michele Bachmann and John Kline voted against the measure.
“Vote no to this bill at your own peril,” Ellison said from the House floor on Wednesday.
“Don’t believe that unless this Congress allows some credit card companies to abuse consumers, no one will have credit. It is just not true … it’s nothing but fear-based stuff,” he said.
The Democratic Congressional Campaign Committee is already targeting House Republicans who voted against the bill, including Bachmann and Kline.
Only one Democrat — Rep. Stephanie Herseth Sandlin of South Dakota — joined Republicans in voting against the measure.
In a conference call with reporters on Thursday, she said that she “fully supports the goal of ensuring fairness, transparency and consumer protection in the credit card industry.”
Herseth Sandlin, however, said she could not support the measure, in part, because it might “cut off credit unnecessarily to consumers and potentially push them into areas that are unregulated.”
In addition, Herseth Sandlin acknowledged that the credit card industry in South Dakota, which employs thousands of people in the state, was a “significant” factor in her decision to oppose the legislation.
The House, which had passed similar legislation last year by a 312-112 vote, picked up additional support this time.
Among other things, the House-passed legislation would require credit card companies to give a 45-day notice before increasing rates, require statements be mailed at least 21 days before payment is due and ban unilateral changes to credit card agreements. The provision would take effect 90 days after the bill is signed into law.
But, the Senate, which is expected to take up the bill next week, could prove to be a different story.
Senate leaders said Thursday that they did not know if they had the required 60 votes to end debate on the measure.
Another South Dakota Democrat, Sen. Tim Johnson, has already voiced opposition to the bill.
“I come from a state that is very dependent on the credit card industry,” Johnson said in an interview with MinnPost last week, adding: “I think that it is premature to be coming down so hard on the credit card issuers before they have a chance to digest the strict policies of the Federal Reserve.”
In December, the Fed enacted its own set of restrictions that are scheduled to take effect in July 2010. While the Fed rules would also seek to limit practices deemed unfair or deceptive, the House bill would accelerate some of those changes and impose even broader restrictions.