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

DATE: TUESDAY, March 17, 1992                   TAG: 9203170338
SECTION: VIRGINIA                    PAGE: B1   EDITION: METRO 
SOURCE: ROB EURE STAFF WRITER
DATELINE: RICHMOND                                LENGTH: Medium

CREDIT-CARD BILL DRAWS VETO

The legislation, backed by Lt. Gov. Donald Beyer, would have eliminated the 25 days consumers enjoy on credit-card debts before interest is charged.

It also removed the 5 percent cap on late-payment charges on cards issued by banks and retail stores.

Wilder said the bill would "weaken the ongoing economic recovery by placing excessive burdens on consumers and by penalizing low-income Virginians who have good credit and pay their bills on time."

Advocates, including the Virginia Banking Association, argued that without the deregulation, some 2,200 jobs dependent on credit cards would move to states with fewer controls on the business.

Consumer groups said that claim was a ploy to raise profits.

"I don't think many people believed the jobs argument," said Jean Ann Fox, president of the Virginia Citizens Consumer Council who estimated that if half the Virginia-based credit cards lost the grace period, cardholders would pay an extra $38 million a year in interest.

Fox believes banks pushed for the bill in response to efforts in Congress to cap credit-card interest rates and a federal court case which threatens to force credit-card companies to observe laws on the books in the cardholder's state.

Currently, about 70 percent of the credit cards held by Virginians are issued by out-of-state companies, most located in states without mandated grace periods.

Beyer argued that the number of cards issued from outside Virginia will increase unless the grace period is eliminated.

He also said competition between credit-card companies keeps the grace period in effect even when not required.

"An issue which affects the jobs of 2,200 Virginians and the competitiveness of an important Virginia industry deserves open and free discussion," Beyer said in a statement Monday.

"I respect the governor's decision . . . but I respectfully disagree."

Wilder said arguments that the bill would protect state jobs "hasn't held sway with me" pointing out that the first mention of the measure came two days before Christmas from the Beyer-led Commission on Economic Recovery.

Wilder said he had not talked with his lieutenant governor, a fellow Democrat, before announcing the veto.

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