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House Approves Expediting Credit CARD Act

This article was written by in Credit. 5 comments.


We reported just a few days ago on the passage of a measure in the House of Representatives to expedite the Credit Card reforms passed earlier this year.

Unfortunately, I left out some of the story, as I’m still figuring out the intricacies of how laws are made, and there were some amendments made to the bill before it passed. In addition to pushing up the enactment date to December 1, 2009 and the other changes we reported, the House version would also:

  • ensure that changes to a credit card agreement that reduce a customer’s interest rate or other fees can be implemented immediately, instead of being subject to the 45-day waiting period required under the CARD Act of 2009 — in other words, the bad things require a delay, the good things do not
  • dictate that any card issuer that imposes a moratorium on increases in rates, fees and terms and conditions of a contract would be exempt from the accelerated date for the provision requiring an issuer to apply a customer’s payment in excess of the minimum amount due, to the highest rate balance — the Credit CARD Act of 2009 fixes the industry abuse of extending a balance by applying payments insincerely. If banks play along and start a moratorium, they can have until Feb. 22 to fix the balance-payment problem.
  • prevent the closure of a credit card account in response to the imposition of a new fee from negatively impacting a consumer’s credit report or credit score

As before, the Senate version includes no additional measures, only moves up the date to Dec. 1. There’s a general sense in the news media that the Senate version would have trouble passing (sound familiar?), but I’m not sure where the pessimism comes from, as the original Credit CARD Act passed with 90% in the Senate.

Here’s the govtrack page to track the Senate version.

Published or updated November 9, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Smithee formerly lived primarily on credit cards and the good will of his friends. He is a newbie to personal finance but quickly learning from his past mistakes. You can follow him on Twitter, where his user name is @SmitheeConsumer. View all articles by .

{ 5 comments… read them below or add one }

avatar Miranda

I guess it's nice that they're moving up the date, but I think, for most people, the damage has already been done. Minimum payments and interest rates have already gone up, since credit card issuers have been jumping on this one. What would have been best for consumers — at least at the outset — would have been immediate implementation when it was passed.

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avatar Miranda

I guess it's nice that they're moving up the date, but I think, for most people, the damage has already been done. Minimum payments and interest rates have already gone up, since credit card issuers have been jumping on this one. What would have been best for consumers — at least at the outset — would have been immediate implementation when it was passed.

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avatar John L.

I agree. These guys clearly didn't need much time at all to start jacking over their customers.

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avatar Consous

Has anyone heard about how they’ll prevent an account closure from hurting a credit score? Can’t see how this law would have anything to do with FICO scoring models- if you have a closed account with a $0 limit, your total available credit will drop by whatever that limit was before you closed it.

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avatar Consous

Has anyone heard about how they'll prevent an account closure from hurting a credit score? Can't see how this law would have anything to do with FICO scoring models- if you have a closed account with a $0 limit, your total available credit will drop by whatever that limit was before you closed it.

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