With Americans now owing more than $945 billion in credit card debt, President Obama today signed into law a bill that will severely limit the ability of credit card issuers to raise interest rates and fees.
“With this bill we are putting in place some common sense reforms designed to protect consumers,” said President Obama in signing the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 (H.R. 627).
The bill largely codifies regulations imposed by the Federal Reserve in 2008, but makes them effective in February 2010, five months sooner than proposed by the Federal Reserve.
Under the bill, the ability of credit card issuers to increase the interest rates of existing customers, charge account maintenance fees and assess penalties will be greatly restricted. Card issuers will be required to notify cardholders at least 45 days before any change in interest rate.
“Millions of cardholders have seen their interest rates jump in just the past six months,” said the President. “One in five Americans carry a balance that has been charged interest rates above 20 percent.”
Card issuers will be banned from enacting rate increases on existing balances due to "any time, any reason" or "universal default" and severely restricted from imposing retroactive rate increases due to late payment. As long as cardholders don’t fall more than 60 days behind on their payments, their interest rates cannot be increased.
In addition, card issuers will be required to disclose all terms of their credit contracts online and in language that consumers can see and understand so they can avoid unnecessary costs and manage their finances. “Every card company will have to post its credit card agreements online, and we'll monitor those agreements to see if new protections are needed,” said President Obama.
Complete details on the provisions of the Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 can be found in this White House Fact Sheet.
And Firearms in National Parks: Oh, the Card Accountability, Responsibility, and Disclosure Act of 2009 also includes a provision allowing people to carry loaded firearms in national parks and wildlife refuges. Well, lots of people do use credit cards to buy guns.
Also See:
Feds to Fight "Deceptive" Credit Card Practices (2008)
Credit Card Bill Allows Guns in National Parks
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