U.S. House bill would ease credit card timeframe

By John Poirier

WASHINGTON (Reuters) - U.S. House lawmakers agreed on Thursday to give credit card companies at least one year to rein in unfair practices, dropping an original proposal for a three-month timeframe.

In a voice vote, a House Financial Services subcommittee approved a bill, called the "Credit Cardholders' Bill of Rights." The chief sponsor of the bill is U.S. Rep Carolyn Maloney, a New York Democrat who was seeking to force credit card companies to change their ways within three months.

After a failed effort for faster reforms, Maloney remained optimistic that Congress would vote on a final credit card bill, especially after similar action taken by the Senate Banking Committee on Tuesday.

"I'm extremely optimistic that we can deliver this important consumer victory to the president's desk this year," Maloney said.

The full House Financial Services Committee could vote on the bill soon after Congress returns from a two-week April break, aides said.

In December the Federal Reserve adopted a set of rules aimed at curbing what Chairman Ben Bernanke called unfair and deceptive practices by credit card companies. In the rules the Fed gave companies until July 2010 to implement changes.

The rules drew criticism from lawmakers and consumer groups who complained that companies were given too much time to change their practices, which included unilaterally changing terms and shocking consumers with higher interest rates, fees and other questionable billing practices.

The American Bankers Association trade group, which represents the biggest credit card companies, have warned that more rules could make it more difficult to price a customer's risk level and therefore reduce the availability of credit.