Legislation to reform the credit card industry is moving quickly in Washington. When we last left off, the House had passed H.R. 627, otherwise known as the Credit Card Holders’ Bill of Rights Act, by a wide margin. While the first major bill opposed by the credit card companies that ever won congressional approval, it included an implementation timeline that aligned with comparable Federal Reserve rule changes set to take effect in July 2010, undercutting the main thrust of the law. Sen. Chris Dodd and the Senate Democrats wanted to push up the timeline and include more consumer protections. Today, we will find out how successful they were:

The Senate may pass the so-called credit-card bill of rights measure as early as today, said Banking Committee Chairman Chris Dodd. Approval would send the measure to a committee to resolve differences with a House version.

“We’ve spent a lot of time over the last number of months trying to help stabilize the financial system,” said Dodd, a Connecticut Democrat. “A lot of attention has been paid to banks. We haven’t spent enough time trying to help consumers.”

Evidently, Senate banking leaders struck a deal over the weekend that appeases enough members of both parties to ensure passage. Reports say it's a mixed bag, similar to the House version in that it outlaws universal default, forces companies to disclose impending rate increases 45 days in advance, and requires lenders to apply payments to balances with the highest interest rates first.

Yet it is stronger in a few key ways. For starters, all changes would have to be implemented nine months after being signed into law, providing consumers three additional months of protection. And while conservatives insisted on allowing banks to hike rates on existing balances in cases when cardholders are 60 days late on a payment, this improves upon the House bill's 30-day limit. The Senate version would also force the card company to restore the original rate if customers pay on time for six months straight following a retroactive hike.

Sen. Dick Durbin is using the bill to fight back against the banking industry that sidetracked his bankruptcy reform bill. Although his chamber voted down a proposal he co-sponsored to cap credit card rates at 15 percent, Politico reports that the Illinois senior senator is offering an amendment that would allow merchants to give consumers a discount to pay by debit card as opposed to a credit card. If less people swiped to pay, small businesses could avoid paying excessive “interchange” fees, the extra charge they fork over to credit card companies for their "services."

But the banks are working hard to water down the proposal even further. According to Consumerist, the American Banking Association sent a letter to senators yesterday suggesting the bill "will have a dramatic impact on the ability of consumers, small businesses, students, and others to get credit at a time when our economy can least afford such constraints." The banks: always looking out for working people.

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