SENATE LIFTS CREDIT CARD REGULATIONS

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, February 27, 1992                   TAG: 9202270337
SECTION: VIRGINIA                    PAGE: A1   EDITION: METRO 
SOURCE: GREG SCHNEIDER STAFF WRITER
DATELINE: RICHMOND                                LENGTH: Medium
SENATE LIFTS CREDIT CARD REGULATIONS
The state Senate voted 28-9 Wednesday to deregulate the credit card industry, ignoring warnings that the action would hurt consumers in favor of assurances that it would help banks.
The bill, already passed by the House of Delegates, removes all caps on credit card fees and allows banks to begin charging interest from the moment something is purchased with a card.
The bank lobby reinforced its clout last fall by giving $111,285 to senators' campaigns. The 28 who supported the credit card bill got a total of $81,250, according to campaign finance records compiled by The Virginian-Pilot and Ledger-Star.
The measure was sold as a way to keep 2,200 credit industry jobs in Virginia, and arose from a study on economic growth headed by Lt. Gov. Don Beyer.
Virginia is one of only seven states with strict credit card regulations. Banks are required to give cardholders a 25-day grace period to pay their bills before interest penalties kick in, and the state limits late fees and other rates.
Beyer and other supporters have argued that lifting those regulations does not mean banks will immediately suspend the grace period or increase fees; more than half of all Virginians have out-of-state credit cards, and virtually all still give the grace period.
One consumer group estimated that if half the Virginia-based credit cards eliminate the grace period, cardholders will pay an extra $38 million a year in interest.
Sen. Frank Nolen, D-Augusta, tried to amend the bill so that cards issued by retailers such as department stores and gas stations still would have to give the grace period, but failed.
The bill now goes to the governor for final action.
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by Bhavesh Jinadra by CNB