H.R. 627 amended the portion of the Truth in Lending Act relating to credit cards. Among other things, the bill gave credit card holders additional rights and protections and enumerated and limited the conditions under which credit card issuers could raise interest rates. This vote was a on the resolution or “rule” setting the terms for debate of H.R. 627. The arguments for and against the rule focused on the underlying bill as well as on the specifics of the rule.
Rep. Perlmutter (D-CO), who was leading the effort on behalf of the rule, began by claiming :“(I)n a time when many Americans are struggling . . . unfair credit card practices threaten many families. Americans deserve . . . reliability and not chaos within their statements.” He noted that the trend over the last twenty years was toward “risk-based pricing” by credit card issuers and, as a result, “rates have increased and fees have increased dramatically. The terms of most agreements have become so complicated, consumers don't know what they are getting into when they sign on to a credit card agreement. Most, if not all, agreements allow the issuer to change the interest rate or other terms of agreement at any time for any reason . . . That’s just not right.”
Rep. Session (R-TX), who was helping to lead the opposition to the rule and to H.R 627, first complained that, by limiting the number of amendments allowed to be offered, the rule “does not call for the open and honest debate that has been promised by my Democratic colleagues time after time.” Rep. Roskam (R-IL) echoed that theme by noting that, of the 52 amendments that were requested to be allowed for consideration, only 17 would be allowed under the rule.
Turning to the substance of the measure, Sessions argued that it was another example of the Democrats having “the Federal Government overstepping its boundaries into the private marketplace” and into an area that should be within the jurisdiction of the states. He argued “that people who get credit cards . . . have a responsibility when they sign a contract to live up to that responsibility.”
Sessions also argued that the legislation was not necessary because the Federal Reserve had recently “passed new credit card rules that would protect consumers and provide for more transparency and accountability in the marketplace. These new regulations are set to take effect in July 2010, an agreed-upon date to ensure the necessary time for banks and credit card companies to make crucial and critical adjustments to their business practices without making mistakes and without harming consumers.”
Sessions went on to argue that, if the legislation is enacted, “it is not credit card companies that will suffer. . . Every American will see an increase in their interest rates, and some of the current benefits that encourage responsible lending will most likely disappear.”
The rule passed by a vote of 249-175 nays along almost straight party lines. All 249 “aye” votes were cast by Democrats. Only one Democrat joined with all one hundred and seventy-four Republicans and voted “nay”. As a result, the House was able to begin debating the bill giving credit card holders additional rights and protections, and limiting the conditions under which credit card issuers could raise interest rates.