Compromise in the Senate on credit card bill promises its certain approval

Credit-card-reform legislation now has more chances to be approved by the Senate this week as the chamber leaders reached a bipartisan compromise that obviously suits both parties. The top members of Democrat and Republican camps at the Senate Banking Committee offered their amendments to the legislation and agreed to promote the jointly modified bill which would limit fees, enhance disclosures and curb some rate practices seen as unfair and predatory by consumer groups.

Thus, the amended bill will include the following new entries. The compromise would allow lenders to raise interest rates on an existing balance if a consumer's payment is 60 days late, while the prior version banned raising rates on current balances. However, the compromise bill would also require issuers to revert to the lower rate if consumers pay their bill on time for six months.

Also, for existing balances the current Senate compromise contains a ban on universal default -- a practice through which issuers use a consumer's history with another creditor to raise interest rates. The prior proposal called for a universal-default ban for both existing and future balances. 

The compromise bill also calls for consumers to "opt-in" to over-the-limit fees, with companies prohibited from charging these fees without consumer permission. The prior version called for consumers to "opt out." And the compromise calls for credit card companies to post consumer agreements on the Internet, a provision called for by the White House.

Now with a number of modifications the legislation might find strong support on part of both camps. The prior version of the bill gained weak approval in committee while it was almost unanimously supported by the House.