Credit card crackdown wins Congress approval
The U.S. Congress on Wednesday gave final approval to a bill that would impose sweeping new limits on the credit card industry, with President Barack Obama expected to sign it into law within days.
In a major win for the president and congressional Democrats, the House of Representatives voted 361-64 to approve the bill as adopted on Tuesday by the Senate. It would sharply restrict credit card issuers' ability to raise interest rates on cardholders' existing balances and to charge certain fees.
The profits of major card issuers -- such as Citigroup, Bank of America, JPMorgan Chase and Capital One would be hurt by the bill, analysts said.
It represents the first of several banking and market rule reforms expected from the administration as it tightens regulatory oversight in hopes of preventing another financial crisis like the one now pounding economies worldwide.
The bill could hit home with more consumers than any other economic initiative launched so far under Obama, with some experts predicting a broad restructuring of how credit cards are priced, managed and marketed.
"These are monumental and expensive changes for credit card issuers to implement," said Duncan Douglass, a lawyer with the firm of Alston & Bird who specializes in payment law.
The KBW Banks index of 24 leading bank stocks was down 2 percent on Wednesday following the House vote, with broader market indexes up modestly on the day.
"This cements a victory for every American consumer who has ever suffered at the hands of the credit card industry," said Senator Christopher Dodd, chairman of the Senate Banking Committee, who steered the bill to Senate passage on Tuesday.
(Editing by Andrea Ricci)
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