The Credit Card Accountability Responsibility and Disclosure Act of 2009
or Credit CARD Act of 2009 is a federal statute 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."
The bill was passed with bipartisan support by both the House of
Representatives and the Senate.
The Credit Cardholders' Bill of
Rights was introduced in the 110th Congress as H.R. 5244 in the House of
Representatives by Representative Carolyn Maloney, a Democrat from New
York and the chair of the House Financial Services Committee's
Subcommittee on Financial Institutions and Consumer Credit. The bill had
passed 312 to 112 but was never given a vote in the Senate.
In
the 111th United States Congress the bill was reintroduced as H.R. 627
and on April 30, 2009, the House passed 357 yes votes to 70 no votes.
The Senate followed suit and passed an amended version on May 19 with 90
yes votes and 5 no votes.[2] The House passed the amended bill the next
day by a vote of 279 to 147 and it was signed into law by President
Barack Obama on May 22, 2009.
The bill went into effect on February 22, 2010, nine months after it was enacted.
The
Credit Cardholders' Bill of Rights includes several provisions aimed at
limiting how credit card companies can charge consumers but does not
include price controls, rate caps, or fee settings.
Gun rights
advocates in the Senate, led by Tom Coburn (R-Okla) added an unrelated
rider to the bill to prevent the Secretary of the Interior from
enforcing any regulation that would prohibit an individual from
possessing a firearm in any unit of the National Park System or the
National Wildlife Refuge System. The Senate passed the amendment 67-29.
This
amendment overturns a Reagan-era policy prohibiting firearms from being
carried in national parks. The George W. Bush administration had
attempted to implement a similar policy through the rulemaking process
just before leaving office, but the change was struck down by a federal
judge. The provision has been heavily criticized by environmentalists,
anti-gun groups, and park supporters, including the Coalition of
National Park Service Retirees, but it was applauded by gun rights
groups.
The act was not expected to affect existing credit card
contracts.[9] However, the act that was passed applies to contracts made
in the past by setting an effective date of February 22, 2010, which
gave banks time to prepare and notify their customers. While it is a
common criticism that the CARD Act led banks to raise interest rates and
limit credit availability in response to its passage, studies by
CardHub.com and the Center for Responsible Lending revealed that such
trends were merely the result of economic pressures typical of a
recession and not the law. Actually, according to these studies,
historical economic data shows that the interest rate increase and
decline in available credit seen during the Great Recession should have
been worse considering the widespread unemployment, credit card
delinquency and credit card charge-offs.
In a speech on the
one-year anniversary of the CARD Act, Special Adviser Elizabeth Warren
said that "much of the [credit card] industry has gone further than the
law requires in curbing re-pricing and overlimit fees." However, she
said there was still much work to be done, that the Consumer Financial
Protection Bureau's "next challenges will be about further clarifying
price and risks and making it easier for consumers to make direct
product comparisons."
In 2012, many stay-at-home mothers
complained that because they have no individual income, the act prevents
them from acquiring credit cards without their husbands' permission. As
of September 21, 2012, the CFPB announced that they would be making the
change due to a petition on Change.org.
http://en.wikipedia.org/wiki/Credit_C...
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