Working to rebuild the economy, Congress enacted tough new protections for consumers-including banning unfair rate increases, abusive fees, and penalties-and strengthening enforcement in the credit card industry. This bipartisan measure of common sense reforms (The Credit Cardholders' Bill of Rights) was signed into law on May 22, 2009 - after several years in the making.
Since that time, instead of preparing to implement these consumer protection provisions, many credit card companies have raised interest rates and minimum payments, increased fees and tightened credit limits on consumers to get in under the wire before the effective date. In the first half of the year, interest rates climbed an average of 20 percent on credit cards representing more than 90 percent of outstanding balances.
On November 4th, the House is passed H.R. 3639, the Expedited CARD Reform for Consumers Act to speed up the credit card reforms. This bill will move up the effective date for nearly all of the credit card reforms to December 1, 2009 and marks another step forward in bringing consumers badly-needed relief. If abusive practices by the credit card industry had not accelerated with passage of the law, there would be no need to move up the implementation date.
Just in time for the holidays, Congress can lock in a ban on interest rate hikes on existing balances and tricks that have kept too many consumers trapped in a never-ending cycle of debt: such as double-cycle billing, due-date gamesmanship, and applying payments to lowest rates first. Our economic recovery depends on a shared prosperity--and we must put an end to what the Federal Reserve declared 'unfair', 'abusive' and 'anti-competitive' practices that continue to drive so many Americans deeper and deeper into debt.
To ensure this timeline is workable, the bill keeps the original effective date of February 22, 2010 forsmall credit card issuers with under 2 million cardholder accounts and forprepaid gift cards (which are already printed with terms and conditions and are now on the way to retailers for the holiday season). Even so, the six largest card issuers control over 80% of the credit card market.