DORGAN SAYS CREDIT CARD BILL WILL PROTECT NORTH DAKOTA CONSUMERS FROM UNFAIR PRACTICES

Average North Dakotan carries a credit card balance of between $3,000 and $6,000

Tuesday, May 19, 2009

CONTACT: Justin Kitsch
or  Brenden Timpe
PHONE: 202-224-2551

(WASHINGTON, D.C.) – U.S. Senator Byron Dorgan (D-ND) said the passage of the bipartisan Credit Cardholder’s Bill of Rights Act will protect consumers from arbitrary fees and interest rate changes, protecting responsible consumers from getting stuck in debt.

According to an estimate by the Federal Reserve, a typical credit card holder in North Dakota carries a balance of between $3,000 and than $6,000. Among other provisions, the legislation prohibits arbitrary increases in interest rates, fees and finance charges, and requires credit card companies to give a 45-day notice instead of the current 15-day notice of any significant changes. It also requires fairness in application and timing of credit card payments, allowing holders to more fairly pay off their balances.

“Credit card debt is hurting households across the country and right here in North Dakota, and many times the credit card companies have a hand in that by tripling interest rates, imposing large penalties with short notice, and targeting credit cards at young people with no source of income,” said Dorgan. “This legislation puts important provisions in place to protect consumers.”

The Credit Cardholders Bill of Rights also places restrictions on the targeting of credit cards to young adults, including those in their first years of college. The legislation requires companies issuing cards to those under 21 years of age to obtain an application that contains the signature of a parent, guardian, or other individual 21 years or older or proof that the applicant has a means of repaying credit, among other provisions.

“Currently many credit card companies are not giving their customers a fair chance to pay down their balances, especially young people who get saddled with debt at a young age with no ability to pay it off,” said Dorgan. “I have received many letters from responsible North Dakotans who pay their bills on time, only to find out that their credit card company has tripled their interest rate – many to 27 or 28 percent. This legislation will bring that to an end.”

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