Monday, February 22, 2010
Owens Praises Implementation of CARD Act
WASHINGTON – Congressman Bill Owens today praised the implementation of H.R. 627, the CARD Act, which contains several strict protections for consumers – banning unfair interest rate increases and forbidding abusive fees and penalties by credit card companies.
“This is an important step toward helping middle-class families in Upstate New York pay off their debt,” said Owens. “For too long the credit card companies have been able to charge exorbitant interest rates which greatly impact a family’s budget. I hope these increased protections will make things a little bit easier for the hardworking families in Upstate New York.”
Called the “Credit Cardholder’s Bill of Rights”, H.R. 627 was signed into law on Mary 22, 2009 and began to take effect in August of last year. Today, the most beneficial initiatives of the bill will begin to ease the burden on middle-class families. Among other consumer protections included in H.R. 627, consumers are now given the right to refuse to accept rate hikes and pay off existing credit card balances under the old rate. In the new law, credit card companies are required to give 45 days’ notice of any rate increases on new purchases. If a consumer receives notice of a rate hike, they can now simply notify the card company that they reject the rate hike and want to close the account.
Additional provisions of H.R. 627:
· Companies must provide notice of any rate hike or change 45 days in advance.
· Account statements must be sent 21 days in advance of the payment due date.
· Interest rate hikes on existing balances are prohibited, only on future purchases.
· Penalty rate increases for payments less than 60 days overdue are banned.
· Charging interest on debts paid on-time is banned.
· “Due-date” gimmicks such as setting morning times for payments, before mail is delivered or charging fees for paying a bill by phone or internet is banned.
· Requires promotional rates to last at least six months.
· Consumers under 21 must demonstrate an ability to pay or have a parent cosign to be eligible for a credit card.