U.S. PIRG Consumer Blog: Obey (D-WI) Victory Reining in Credit Card Companies Snatched Away by Oxley (R-OH) and Rules Committee

Last week, on a broadly bi-partisan vote, Rep. David Obey (D-WI) passed an important committee amendment to HR 3058, the Treasury Appropriations bill, banning the unfair credit card practice known as universal default. The bill is on the House floor today, but House Financial Services Committee chairman Michael Oxley (R-OH) has convinced the Rules Committee to make the Obey amendment (section 945 of HR 3058) out of order and null and void.

Last month, the witnesses for the big credit card companies virtually all made sweeping statements in a Senate Banking Committee hearing claiming that -- all of a sudden -- they do not raise consumer interest rates to a punitive 25-30% APR when a consumer is allegedly late to another creditor or has their credit score decline but otherwise has a perfect record to that credit card company. Despite the big bank posturing, so-called "universal default" is the source of a lot of the consumer complaints we receive, and remains one of the extremely profitable credit card industry's most deplorable practices. For more information about universal default and other stupid credit card company tricks, see Truthaboutcredit.org.