CCH Issues New White Paper Credit Card Reform: An Analysis of the Credit CARD Act
Posted on: Friday, 22 May 2009, 16:21 CDT
"Against the backdrop of consumers' increasing credit card debt, the Act provides protection for consumers and increases supervision of credit card issuers, providing greater transparency for both consumers and regulators," said Bianco. "While regulators had taken steps beginning in 2008 to provide for greater protections, the Act reflects a desire by Congress to ensure that adequate protections are in place in a more timely way."
The President is expected to sign the measure into law today. The credit card reforms generally become effective nine months after enactment.
With the U.S. economy in crisis mode, households increasingly have used credit cards for routine expenses. Nearly 75 percent of U.S. households use at least one general-purpose credit card, and revolving consumer credit in
The Act is intended to ban abusive credit card practices, enhance consumer disclosures and protect underage consumers. It contains a number of provisions intended to provide protection to consumers from unreasonable interest rate increases and credit card fees. It also increases supervision of credit card issuers, enhancing transparency of their practices, and includes measures intended to shield consumers from misleading use of terms in credit card statements and solicitations.
The Act bans double-cycle billing and retroactive interest rate hikes on existing balances, unless payment is at least 60 days late, and requires card issuers to provide 45 days advance notice of any impending rate hike. The measure also targets credit card marketing to consumers under the age of 21, prohibiting issuers from making pre-screened credit card solicitations to underage individuals unless the individual expressly opts into receiving the solicitations.
For More Information
For a copy of the white paper, visit: Credit Card Reform: An Analysis of the Credit CARD Act or http://business.cch.com/securitiesLaw/news/CreditCard.pdf.
CCH also offers a wealth of special resources related to the financial crisis at the CCH Financial Crisis News Center, financialcrisisupdate.com. The Center provides the legal community and others with a cohesive and robust selection of breaking news stories, analysis and links to the full text of source documents for regulatory actions and serves as a central entry point for CCH banking and securities law resources related to the crisis.
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