Lawmakers seek to speed up credit card law

WASHINGTON, Nov. 10 (UPI) -- Legislators in Washington are pursuing options to close the grace period lawmakers gave credit card companies when they passed the credit card law in May.

When the law was passed, lawmakers gave credit card companies until Feb. 22 before the law was to take effect.

The law provides consumers with a mandatory 45-day warning before lenders can change rates and extends the period between when a bill is sent and when a company can declare the minimum payment overdue, among other measures.

Now lawmakers are seeking to have the bill take effect immediately. The House approved such a step last week, The New York Times reported Tuesday.

Chairman of the Senate Finance Committee Christopher Dodd, D-Conn., is backing a bill that would make it illegal to raise interest rates on existing credit accounts until the law takes effect.

Lawmakers are seeking changes as consumers have complained of sharply rising interest rates. In advance of the new law, some interest rates have jumped as high as 29.99 percent, the Times said.

Banks are facing increased defaults on accounts and fewer customers. In the past year, the number of accounts at four major companies dropped by 72 million, said David Robertson, who publishes The Nilson Report.