H.R. 3639: Expedited CARD Reform for Consumers Act

H.R. 3639

Expedited CARD Reform for Consumers Act

Rep. Carolyn B. Maloney

November 4, 2009 (111th Congress, 1st Session)

Staff Contact

Floor Situation

H.R. 3639 is expected to be considered under a structured rule on November 4, 2009. The legislation was introduced by Reps. Carolyn Maloney (D-NY) and Barney Frank (D-MA) on September 24, 2009. The bill was ordered to be reported, as amended, by the Committee on Financial Services on October 22, 2009. The rule provides one hour of debate equally divided.

Bill Summary

H.R. 3639 would accelerate the implementation dates of the Credit Card Accountability Responsibility and Disclosure Act of 2009, moving the nine-month (February 20, 2010) and 15-month (August 22, 2010) implementation dates up to December 1, 2009. The February rulemaking addresses the majority of the provisions in the Credit CARD Act, including the limitations on rate increases for existing balances, the requirement that creditors consider a consumer's ability to make the required payment before opening a credit card account or increasing a credit limit, the provisions addressing extensions of credits to consumers who are under 21, the limitations on the assessment of fees for exceeding the credit limit, the requirement that payments above the minimum generally be allocated first to that balance with the highest rate, and the prohibitions on double-cycle billing and on charging interest on amount paid prior to the expiration of the grace period. The August provisions address fees and disclosures for gift cards and other prepaid cards, the amount of credit card penalty fees, and the requirement that creditors re-evaluate past credit card rate increases every six months.


Some members may be concerned that since the Credit CARD Act was signed into law on May 22, 2009, consumers, including many small businesses, have experienced a dramatic decrease in the availability of credit.  Seventy-nine percent of small businesses surveyed by the Small Business Administration said that credit card lending has tightened since last year. Small business lending is down almost $118 billion since the fourth quarter of 2008 and 10 percent of all credit-card lines have been cancelled outright. 

Federal Reserve Chairman Ben Bernanke expressed his concerns regarding the harmful impact of H.R. 3639.  In an October 9, 2009 letter to Rep. Spencer Bachus (R-AL), Chairman Bernanke stated,

"Creditors must make extensive changes to their systems and business models in order to comply with the Credit CARD Act...Creditors must also revise underwriting systems for all new and existing credit card accounts, develop new systems for calculating interest charges when balances are partially paid during a grace period, create procedures for submitting credit card agreements for publication on the Board's website, and design new disclosures regarding the consequences of making minimum payments."

"Board staff understands that many small institutions (such as community banks and credit unions) rely heavily on third-party vendors to adjust their systems and that these vendors are currently overwhelmed by the demand from all of the institutions they service."

"Board staff also notes that creditors are not the only entities that must comply with the Credit CARD Act.  In particular, the Act requires institutions of higher education to disclose agreements with credit card issuers regarding the marketing of credit cards to student.  Many of these institutions may be unaware of the new requirement and will require some time to put procedures in place to make these agreements available."


The Congressional Budget Office (CBO) estimates that enacting this bill would have no significant effect on revenues or net direct spending. H.R. 3639 would impose private-sector mandates. The CBO estimates that the aggregate cost of those mandates would probably exceed the annual threshold established in UMRA for private-sector mandates ($139 million in 2009, adjusted annually for inflation).


1. Rep. Hensarling (R-TX):  The amendment would clarify that changes to a credit card agreement that reduce a customer's interest rate or other fees can be implemented immediately, instead of being subject to the 45-day waiting period required under the CARD Act of 2009.

2. Rep. McCarthy (D-NY):  The amendment would provide that any card issuer that imposes a moratorium on increases in rates, fees, and terms and conditions of a contract would be exempt from the accelerated date for the provision requiring an issuer to apply a customer's payment in excess of the minimum amount due, to the highest rate balance.

3. Rep. Maffei (D-NY):  The amendment would set the effective date of certain provisions of the CARD Act of 2009 to the enactment date of this Act.

4. Rep. Sutton (D-OH):  The amendment would prevent the closure of a credit card account in response to the imposition of a new fee from negatively impacting a consumer's credit report or credit score.

5. Rep. Stupak (D-MI):  The amendment would impose a moratorium on increasing annual percentage rates, fees and finance charges, as well as a moratorium on changing the terms for repayment of outstanding balances on credit card accounts, for nine months after enactment of this Act.