Credit Card Accountability, Responsibility, and Disclosure Act (CARD)

Credit Card Accountability, Responsibility, and Disclosure Act (CARD)

The Credit Card Accountability Responsibility and Disclosure Act of 2009 or Credit CARD Act of 2009 was passed by the United States Congress and signed by President Barack Obama on May 22, 2009. It is comprehensive credit card reform legislation that aims "...to establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan, and for other purposes."

Key features include:
•    Protections against arbitrary interest rate increases
•    Elimination of penalties on cardholders who pay on time
•    Clarification of due dates
•    Protections from misleading terms
•    Cardholders have right to set limits on their credit
•    Card companies must fairly credit and allocate payments
•    Prevents card companies from imposing excessive fees on cardholders
•    Better Congressional oversight of the credit card industry
•    Limits credit cards to teens

Cry Wolf Quotes

Dodd’s misbegotten bill would reduce competition and raise costs for the consumer—all so his office can generate press releases that say things like ‘Dodd Fights Card Companies.’ In fact, his fight will end up hurting his own constituents.

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Thomas Brown, Bankstocks.com.

If you compare what the card industry looked like 20 years ago to how it looks today, you’ll be astonished at how much better a deal consumers are lately getting. And government regulation isn’t what drove the improvement; free-market innovation and competition, did. Twenty years ago, all consumers paid the same interest rate—and it wasn’t low (19.8%).

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Thomas Brown, financial columnist, Bankstocks.com.

I think that every single company that offers a credit card is reassessing its cost….reassessing what they do and how they do it.

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Marcia Sullivan, director of government relations for Consumer Bankers Association, USA Today.

The bill would, for instance, prohibit card companies from changing the rates they charge ‘at any time, for any reason.’ Translation: instead of a borrower’s interest rate varying up and down, it will just stay up. Or fees will rise, to offset issuers’ loss of pricing flexibility.

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Thomas Brown, Bankstocks.com.

Evidence

Backgrounders & Briefs

A Timeline of the CARD Act

An interactive timeline of credit card reform.