Dear Friend,

I cosponsored the Credit Card Bill of Rights, which will rein in some of the most abusive credit card practices. The new law bans retroactive interest rate hikes on existing balances, double-cycle billing (charging interest twice for balances paid on time) and due-date gimmicks. This bill is now law and goes into effect today.

The bill also protects cardholders against arbitrary interest rate increases and requires the card companies to allocate payments to pay off the debt that bears the highest interest rate first. It requires companies to mail statements at least 21 days before the due date.

I am working on legislation to prevent abuses in overdraft protection. New legislation would require banks to obtain the consumer’s consent before enrolling them in costly overdraft programs. Banks would be required to warn customers when an ATM transaction would cause an overdraft and give the customer the opportunity to cancel the transaction before the overdraft fee is charged. Finally, banks would be prohibited from re-ordering withdrawals to maximize customer fees.

Lastly, I cosponsored the Consumer Financial Protection Agency Act that was adopted by the Financial Services Committee last fall. The Consumer Financial Protection Agency will ensure that banks treat customers fairly and have the authority to prevent and punish abusive financial company practices.

I look forward to keeping you informed. If you would like to continue to receive updates on this and other issues I’m working on in Congress, please sign up to receive E-Alerts by replying “Subscribe” to this email.

You can also follow me on Twitter by visiting Twitter.com/BradSherman, or become my fan on Facebook. My official government Facebook page is registered as “Congressman Brad Sherman.”

Sincerely,

Congressman Brad Sherman