Submitted by Cong. Bill Owens (D-Plattsburgh)
WASHINGTON â€“ Congressman Bill Owens today praised new implementations of H.R. 627, the CARD Act, which contains several strict protections for consumers â€“ banning unfair interest rate increases and forbidding abusive fees and penalties by credit card companies. Additional consumer protections under this legislation will go into effect this Sunday, August 22 under the Credit Cardholdersâ€™ Bill of Rights.
â€œThese increased consumer protections will put more control into the hands of credit card holders and will hopefully go a long way in helping them to manage finances and pay off debt,â€ said Owens
In addition to the tough consumer protections that are already implemented, on August 22, two additional provisions of the Credit Cardholdersâ€™ Bill of Rights go into effect: 1) requiring penalty fees for such things as late payments to be reasonable and proportional; and 2) requiring credit card companies, if they raise your interest rate, to re-evaluate that rate increase every 6 months and, if appropriate, reduce that rate within 45 days after completing the evaluation.
Some of the key consumer protections in the Credit Cardholdersâ€™ Bill of Rights that went into effect in August 2009 and February 2010 include:
* Prohibits retroactive interest rate hikes on existing balances.
* Bans double-cycle billing (charging interest twice on balances paid on time).
* Ensures fairness of due dates, including requiring statements be mailed 21 days in advance of the payment date and requiring the payment date to remain the same each month.
* Requires 45-daysâ€™ advance notice of interest rate, fee and finance charge hikes.
* Strengthens credit card protections for young people.
* Requires that billing statements from credit card companies be clear, be in plain English, and show how long a balance will take to be fully paid off if only the minimum payment is made.
A recent report from the Pew Charitable Trust called the Credit Cardholdersâ€™ Bill of Rights â€œa major milestone in the move to make credit cards safer, transparent and more fair for consumers.â€ In addition, a recent analysis by USA Today concluded that the new credit card protections, along with debit-card overdraft reforms recently instituted by the Federal Reserve, will save U.S. consumers at least $5 billion in fees this year alone.
â€œEnacting these key protections will ensure responsible consumers will maintain the spending power to develop our local economy in Upstate New York without the worry that they will be crushed by crippling disproportionate penalties by their creditors,â€ added Owens.