By Sarah Borchersen-Keto, Washington Staff Writer

Following closely on the heels of the Senate's passage of credit card reform legislation on May 19, the House of Representatives voted 361 to 64 on May 20 to adopt the Credit Cardholders' Bill of Rights Act. President Obama has said he will sign the bill into law before Memorial Day.

"These are important reforms to protect consumers and to bring some common sense rationality into our financial system, and the president looks forward to signing it as quickly as possible," said White House spokesman Robert Gibbs.

Rep. Carolyn Maloney, D-N.Y., who sponsored legislation in the House, said "today is a victory for all credit cardholders. Let's be clear about what we've done: we have banned practices the Federal Reserve has declared deceptive, unfair and anti-competitive." Senate Banking, Housing and Urban Affairs Committee chairman Christopher Dodd, D-Conn., said passage of the bill meant that consumers had scored a "giant victory that ensures they are protected from practices that would drive them further into debt, while also making our economy stronger."

The bill bans double-cycle billing and retroactive interest rate hikes on existing balances unless they are 60 days or more late, while requiring card issuers to provide 45 days advance notice of any impending rate hike. Statements would also have to be mailed 21 days before the bill is due, rather than 14 days at present.

Other provisions of the bill strengthen protections for younger consumers. The legislation requires individuals under 21 to either prove that they have independent means with which to repay the credit, or else have the signature of a parent or guardian. Meanwhile, protections against aggressive credit card marketing to students will be increased.

Additional provisions would prohibit card issuers from charging consumers for paying bills either by mail, phone or electronic transfer. Fees could still be incurred for using live services in order to expedite payments. Issuers would also be prohibited from charging over-limit fees unless cardholders allow the issuer to complete over-limit transactions.

Meanwhile, American Bankers Association president Edward Yingling said the bill "fundamentally changes" the entire business model of credit cards by restricting the ability to adjust the price of credit for risk. "While the recent Federal Reserve rule also contained restrictions on pricing card credit for risk, this bill goes much further in this and other areas," Yingling said. "We are concerned that the [legislation] will have a dramatic impact on the ability of consumers, students, and small businesses to obtain and use credit cards," he added.

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