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
Legislation likely to result in higher interest rates for consumers is not the answer. [This bill] would broadly constrain the ability of financial institutions to price risk, likely resulting in less access to credit and in higher interest rates for consumers.
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%).
[The bill], while well-intentioned, will increase the cost of credit for consumers and small businesses across the country, result in less access to credit for consumers and businesses alike, and may further roil the securities markets -- all at a time when our economy can least afford it.
ABA is very concerned about the direction this legislation is headed and we are concerned over the impact it will have on the ability of consumers, students and small businesses to get credit cards.
Evidence
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Banking Lobby's Warnings About CARD Act Disproven
What happened after credit card reform bill passed Congress in 2009 (it worked).
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The Successes of the CARD Act
The Consumer Financial Protection Bureau describes exactly what the act did and what the effects were one year later.
Backgrounders & Briefs
A Timeline of the CARD Act
An interactive timeline of credit card reform.
