Bill targeting high credit card rates goes to governor
May 16, 2007
A bill banning “universal default clauses” that have enabled some credit card issuers to boost interest rates by 30 percent or more won final legislative approval in the Nevada Assembly on Wednesday and was sent to Gov. Jim Gibbons for his signature.
The Assembly also passed a high school reform bill that, among other things, raises the age that students must go to school from 17 to 18 years old and that local school district officials around the state say will cost millions of dollars.
SB302, the credit card bill, targets clauses that enable some credit card companies to boost interest rates if a customer misses a payment on a completely separate account.
The bill was sponsored by Senate Minority Leader Dina Titus, D-Las Vegas, who has described the interest-raising tactics as “outrageous and unbelievable.” Titus has said most cardholders aren’t even aware of the clauses.
Several large banks, including Citibank and Chase, recently rolled back or eliminated universal default clauses due to political pressure in Congress.
If the bill is signed by Gibbons, Nevada would join a handful of states that have banned universal default clauses. Many Nevada consumers still wouldn’t be protected since the U.S. Supreme Court has ruled that states can’t regulate banks that are based out-of-state – and most cards are issued by such banks.
The high school reform bill, AB212, raises the age for compulsory school attendance from 17 to 18, requires the state Department of Education to create grading standards for high schools, and requires school boards at schools with over 1,200 students to create a ninth grade school that is distinct from the rest of the school.