(WGN-AM)- The Senate passed a wide reaching credit card reform bill on Tuesday.

The legislation bans arbitrary rate hikes and excessive fees. It also requires a 45-day notice before any interest rate hike takes effect.

The Senate passed the bill Tuesday, 90-5. The House puts the bill to a vote today and it is expected to pass.

Representative Don Manzullo told WGN's John Williams that he is probably voting yes.

"You don't want to get in the way of private enterprise in issuing credit," he said. "On the other hand, you don't want to see people, who are getting credit, be at the short end of someone perhaps taking advantage of them."

The bill would include a requirement that customers penalized by higher interest rates because they missed a payment are given a chance to reclaim their lower rate after six months.

"Card issuers raise rates for unclear reasons, use billing methods that consumers do not understand, and assign fees and charges without warning," said Sen. Richard Shelby of Alabama, the top Republican on the Senate Banking Committee.

President Barack Obama is expected to sign the bill into law. Treasury Secretary Timothy Geithner on Tuesday said the bill would "create a more fair, transparent and simple consumer credit market."

Of the five senators sympathetic to card lenders, two were from South Dakota, where thousands of jobs depend on the industry. Republican Sen. John Thune estimated the bill would cost as many as 5,000 jobs in his home state.

Sen. Tim Johnson, also from South Dakota and the only Democrat to oppose the bill, agreed it could be devastating.

"This is a time when millions of consumers are already facing lower credit limits and higher interest rates on their credit cards because of decreasing credit availability and continued economic instability," he said.

Also opposing the bill were GOP Sens. Lamar Alexander of Tennessee, Robert Bennett of Utah and Jon Kyl of Arizona.

But their voices were drowned out by lawmakers who said their offices had received dozens of complaints from voters.

Under the new bill, a customer would have to be more than 60 days behind on a payment before seeing a rate increase on an existing balance. Even then, the lender would be required to restore the previous, lower rate after six months if the cardholder pays the minimum balance on time.

Consumers also would have to receive 45 days' notice and an explanation before their interest rate was increased.

Some of these changes, including the 45-day notice requirement, are already on track to take effect in July 2010 under new rules being imposed by the Federal Reserve. But the legislation would put these changes into law and go further in restricting the types of bank fees and who could get a card.

For example, the Senate bill requires those under 21 who seek a credit card to prove first that they can repay the money or that a parent or guardian is willing to pay off their debt if they default.

(The Chicago Tribune contributed to this story)

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