New credit card reforms went into effect Thursday, August 20 that protect consumers, increase competition and allow credit markets to function more efficiently.
The Credit Card Accountability, Responsibility and Disclosure Act (Credit CARD Act) signals “the beginning of the end of unfair, deceptive and anti-competitive practices by credit card issuers,” according to its author, Congressmember Carolyn Maloney.
Under new reforms activated by the legislation, credit card issuers must provide written notice to consumers 45 days prior to enacting any interest rate increases or other significant account changes; inform credit card holders of their right to cancel their card prior to a rate hike taking effect; and send notifications to consumers 21 days before the due date of any payment.
While other provisions such as bans on rate hikes on existing balances and double-cycle billing take effect in February of 2010, Maloney said the newly enacted reforms “end decades of business-as-usual for card companies.”
Chuck Bell, the programs director for Consumers Union, the publisher of Consumer Reports, hailed the passing of the protections as “a great day for consumers.”
Bell added that the legislation “reins in abusive and deceptive” practices and “restores fairness to the marketplace for financially vulnerable families, who are struggling in this sharp economic downturn.”
Consumers who suspect their banks are not adhering to the new requirements can submit a complaint with the Office of Comptroller of the Currency – which regulates the credit card industry – online any time at www.occ.treas.gov or by calling 1-800-613-6743 between 8 a.m. and 8 p.m. Monday through Friday.
