New law targets high credit card rates
(AP) – A bill banning “universal default clauses” that have enabled some credit card issuers to boost interest rates by 30 percent or more was signed into law Friday by Gov. Jim Gibbons.
SB302 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 described the interest-raising tactics as “outrageous and unbelievable.” Titus 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. At least five bills are pending in Congress that would further tighten regulations on credit cards.
Nevada joins a handful of states that have banned universal default clauses. Many Nevada consumers still aren’t 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.
Other measures signed Friday by Gibbons include:
• AB217, which requires one of the at-large members of the State Environmental Commission to have expertise and experience as an advocate for conservation issues.
• AB6, which allows counties to negotiate discount prescription drug contracts.
• AB575, repealing an obsolete statute on county workhouses for indigents.