On may 22, 2009, the credit card act of 2009 was signed into law by president barack obama. A guide to the credit card act of 2009 4 terms balance transfer a balance transfer occurs when the outstanding balance of one credit card or several credit cards is moved to another credit card account. First data thought it would be helpful to provide clients with an overview of h. The credit card act of 2009 was put in place to address issues consumers were having with excessive interest charges, among other things, and to help the consumer get off the credit card highway. The full title of the law public law 11124 is the credit card accountability responsibility and disclosure act of 2009. Consumer experiences with credit cards federal reserve.
Credit card accountability, responsibility and disclosure. The credit card act of 2009 is a public law that protects american citizens against unfair consumer credit card rates and fees. The minimum payment disclosures i have seen are printed on the backs of monthly statements. Credit card act of 2009 credit accountability responsibility. Credit card act of 2009 after months of political and legislative wrangling, the u. Public law 11124may 22, 2009 credit card accountability responsibility and disclosure act of 2009 kgrant on pohrrp4g1 with public law verdate nov 24 2008 19. Provisions in the 2009 credit card act 1 consumer action fact sheet know the new credit card law the credit card accountability responsibility and disclosure card act of 2009 provides many new consumer protections for credit cardholders. The house passed the senates version of the credit card act of 2009. Many consumers feel that credit card companies take advantage of their business and entrap cardholders into paying fees and higher interest rates than they originally expected. Changes to the credit card industry credit card act of 2009. For every credit card sin, even minor ones, there used to be fireandbrimstone consequences from the issuer. Examining the billing, marketing and disclosure practices of the credit card industry, and their impact on consumers.
Implementation guidelines by stanton koppel, nicole ibbotson and helen lee on may 22, 2009, president obama signed into law the credit card accountability responsibility and disclosure act of 2009, also known as the credit card act of 2009 the credit card act or act. Credit card act of 2009, protections for cardholders. This act was designed to limit the manner in which credit card companies can charge their customers. The final rule sets forth new protections for consumers that purchase or use gift cards. Posted by ryan guina last updated on october 17, 2016 credit cards advertiser disclosure. The credit card accountability responsibility and disclosure act of 2009 is an amendment to the truth in lending act. Consumer protection and credit legislation credit card. The credit card accountability responsibility and disclosure act card act became law in 2009. Until the bills passage, the credit card industry was rife with predatory practices. The credit card accountability responsibility and disclosure act of 2009 the credit card act is a promising answer to the problem of implementing reforms that protect credit card users. In 2009 the federal government passed the 2009 credit card act. Card act report consumer financial protection bureau. The obama administration presented the credit card act in may, 2009 to protect customers from hidden fees and unexpected interest rate hikes. The credit card accountability responsibility and disclosure act of 2009, also known.
The legislation will improve consumer disclosures and end some egregious practices in the credit card industry but stops short of capping interest rates and fees. An act relating to credit, and for related purposes. For example, the law prevents credit card issuers from increasing your interest rate charged on existing balances and requires these lenders to provide 45 days notice before changing the terms of a card, such as increasing the interest rate. The credit card act of 2009 was intended to prevent practices in the credit card industry that lawmakers viewed as deceptive and abusive. The new law focuses on credit card lending practices and consumer protections. The credit card accountability responsibility and disclosure act of 2009 credit card act was enacted to ensure fair treatment of consumers and transparent practices relating to the extension of credit under openend consumer credit accounts, including credit cards. Its purpose was to curtail deceptive and abusive practices by credit card issuers. Card providers could raise interest rates without notice and market aggressively to young consumers. The credit card accountability responsibility and disclosure act or the credit card act of 2009 was passed by the united states congress in 2009, expanding on the truth in lending act tila, and took effect in 2010. On may 22, 2009, president obama signed into law the credit card accountability responsibility and disclosure act of 2009, also known as the credit card act of 2009 the credit card act or act. Congress passed landmark legislation to reform certain credit card lending practices, and the bill was signed into law by the president on friday, may 22. On may 22, president barack obama signed the credit card accountability, responsibility and disclosure, or credit card, act of 2009 into law.
In addition to this protection, credit card companies must also abide by clear and uniform rules before certain actions can be taken against a consumer or before a consumer can be charged additional rates and fees. The credit card act of 2009 required that credit card issuers place plain and simple minimum payment information on credit card statements. Look to your monthly statements to learn more about your minimum payments. The card act requires that card issuers evaluate a consumers ability to pay before opening a new credit card account or increasing a credit limit. The credit card act of 2009 provided much needed reform to consumer credit cards which had subjected cardholders to unreasonable fees, soaring interest rates and arbitrary rules. Subject to rulemaking pursuant to section 205b of the credit card act of 2009, any advertisement for a free credit report in any medium shall prominently disclose in such advertisement that free credit reports are available under federal law at. Cannerandgregoryelliehausen,ofthedivisionofresearchandstatistics,prepared thisarticle. Subject to rulemaking pursuant to section 205b of the credit card act of 2009, any advertisement for a free credit. Pdf the credit card act of 2009what is it, and what.
Credit card accountability responsibility and disclosure. Understanding the credit card act of 2009 introduction although millions of households enjoy the convenience of credit cards, others have found themselves in financial trouble because of them. For many consumers, the credit card act of 2009 offered muchneeded relief. Highlights of final gift card rule the final rule amends regulation e to implement the gift card provisions of the credit card accountability responsibility and disclosure act of 2009 credit card act. The credit card act seeks to protect consumers from. It amends the truth in lending act, the federal trade commission act and the electronic funds transfer act. Credit card accountability responsibility and disclosure act of 2009 or the credit card act of 2009 sec. The credit card act of 2009 what is it, and what does it do.
Coming on the heels of the recession, many people expected big changes to come that would protect them as credit card users. The card act of 2009 the credit card accountability, responsibility and disclosure act of 2009 offers new protections to consumers, including special protections for students and those under 21. Credit card act card act the card act, passed in 2009, has a number of consumer protection provisions. The presidents signing of the credit card act represents the culmination of a long process of negotiations between consumer groups, credit card companies, politicians and other. The cfpb amends card act rule to make it easier for stay. Credit card contracts and statements can be tricky. It looks as though we will be seeing some of the first serious credit card reform sincewell, ever. This act a amends the truth in lending act to prescribe openend credit lending procedures and enhanced disclosures to consumers, limit related fees and charges to consumers, increase related penalties, and establish constraints and protections for issuance of credit cards to minors and students numerous sections. Theyd allow customers to spend over credit limits and then levy high fees. Credit card accountability, responsibility and disclosure act of 2009.