CARSON CITY, Nev. (AP) - A bill banning "universal default clauses" that have enabled some credit card issuers to boost interest rates by 30 percent or more won final legislative approval in the Nevada Assembly on Wednesday and was sent to Gov. Jim Gibbons for his signature.
The Assembly also passed a high school reform bill that raises the age that students must go to school from 17 to 18 years old - a change that local school district officials around the state said would cost them millions of dollars.
SB 302, the credit card bill, targets clauses that enable some credit card companies to boost interest rates if a customer misses a payment on a completely separate account.
The bill was sponsored by Senate Minority Leader Dina Titus, D-Las Vegas, who has described the interest-raising tactics as "outrageous and unbelievable." Titus has said most cardholders aren't even aware of the clauses.
Several large banks, including Citibank and Chase, recently rolled back or eliminated universal default clauses due to political pressure in Congress. At least five bills are pending in Congress that would further tighten regulations on credit cards.
If the bill is signed by Gibbons, Nevada would join a handful of states that have banned universal default clauses. Many Nevada consumers still wouldn't be protected since the U.S. Supreme Court has ruled that states can't regulate banks that are based out-of-state - and most cards are issued by such banks.
The high school reform bill, AB212, raises the age for compulsory school attendance from 17 to 18, requires the state Department of Education to create grading standards for high schools, and requires school boards at schools with over 1,200 students to create a ninth grade school that is distinct from the rest of the school.
Assemblywoman Bonnie Parnell, D-Carson City, told the Assembly
that the bill would increase graduation rates.
"AB212 is a bill that finally addresses the needs of our high school students. For a long time we've done a great job preparing our very youngest to be literate, to learn math skills, but in the meantime, we've put our high school students on the back burner," Parnell said.
The Assembly also passed SB269, which gives rights to military bases to appeal land-use decisions made by local governments that affect the bases.
(Copyright 2007 by The Associated Press. All Rights Reserved.)