NEW YORK - On Friday, Rep. Rangel called the Credit Cardholders’ Bill of Rights a major success for America’s consumers and pointed out that two additional provisions would be going into effect on Sunday, August 22.
“Studies show that the Credit Cardholders’ Bill of Rights will lead to billions of dollars in savings for America’s consumers each year. This translates into hundreds, if not thousands, of dollars in savings for individual households in my district because Congress said ‘Enough is Enough’ to the credit card companies,” said Rep. Rangel.
Most of the provisions in the Credit Cardholders’ Bill of Rights, signed by President Barack Obama last May, became effective in August 2009 and February 2010. After August 22, penalty fees for such things as late payments are required by law to be reasonable and proportional. The additional provisions also require credit card companies, if they raise your interest rate, to re-evaluate that rate increase every 6 months and, if appropriate, reduce that rate within 45 days after completing the evaluation.
The landmark consumer protection legislation already:
• Prohibits retroactive interest rate hikes on existing balances.
• Bans double-cycle billing (charging interest twice on balances paid on time).
• Ensures fairness of due dates, including requiring statements be mailed 21 days in advance of the payment date and requiring the payment date to remain the same each month.
• Requires 45-days’ advance notice of interest rate, fee and finance charge hikes.
• Strengthens credit card protections for young people.
• Requires that billing statements from credit card companies be clear, be in plain English, and show how long a balance will take to be fully paid off if only the minimum payment is made.
A recent report from the Pew Charitable Trust called the Credit Cardholders’ Bill of Rights “a major milestone in the move to make credit cards safer, transparent and more fair for consumers.” In addition, a recent analysis by USA Today concluded that the new credit card protections, along with debit-card overdraft reforms recently instituted by the Federal Reserve, will save U.S. consumers at least $5 billion in fees this year alone.
“Requiring penalty fees by credit card companies to be reasonable and proportional, which goes into effect on August 22, will be another key protection for America’s consumers – ensuring consumers no longer face disproportionate penalties by creditors,” Rep. Rangel concluded.
If you'd like to learn more about what Congressman Rangel is doing in Washington and around the district, please visit his website at www.rangel.house.gov.
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