Release: Senate Approves Credit Card Consumer Rights

WASHINGTON, May 19 - The Senate today voted 90 to 5 for legislation that would ban arbitrary interest rate hikes as part of an overhaul of credit card industry rules. Sen. Bernie Sanders (I-Vt.) voted for the bill, which includes provisions he has championed for years, but he pledged to continue his fight for a nationwide cap on interest rates.

"It is a good bill. It is an important step forward in protecting consumers, but I am going to be back on this issue of usury. In the United States of America we have got to finally tell banks and credit card companies that it is simply not acceptable to charge people 25 percent, 30 percent or 35 percent interest rates," Sanders said in a Senate floor speech.

Senators last week turned back an effort by Sanders to set a maximum interest rate of 15 percent. Senate Banking Committee Chairman Christopher Dodd (D-Conn.), who voted for Sanders' amendment, said "there is a strong desire in the country to get our arms around the issue of exorbitant interest rates."

The overall bill, Sanders added, "is a step forward in protecting consumers." Under The Credit Card Accountability, Responsibility and Disclosure Act, lenders would have to post their credit card agreements online, let customers pay their bills online or by phone for free and give customers 45 days notice before interest rates are increased. Another provision says customers would have to be more than 60 days late on a payment before seeing rates go up on an existing balance.

Sanders has battled credit card companies for years. In 2003, then-Rep. Sanders introduced a bill to prevent credit card issuers from jacking up interest rates on consumers who always paid their credit card bills on time. He also offered an amendment to ban bait-and-switch tactics by credit card companies.

In 2005, he introduced the Loan Shark Prevention Act, which would have capped interest rates on all loans at 14 percent and put a $15 limit on bank fees. Earlier this year, Senator Sanders introduced the Interest Rate Reduction Act to cap interest rates on all loans at 15 percent, the same cap that Congress imposed on credit union loans in 1980.

"We have heard from thousands of Vermonters and people all over this country who are outraged by having to pay 25 percent of 30 percent interest rates on their credit cards. Usury in America must be outlawed and I intend to continue the fight to cap interest rates," Sanders said.