Titus Highlights Credit Card Reforms That Take Effect Today

Press Release

Congresswoman Dina Titus of Nevada's Third District highlighted additional credit card reforms that begin to take effect today, nine months after President Obama signed the Credit Cardholders' Bill of Rights. Key reforms include prohibiting arbitrary interest rate increases and prohibiting interest charges on dept paid on time, also known as double-cycle billing.

"For too long, consumers have been subjected to the whims of the credit card companies that have been focused on padding their bottom line through unfair rate hikes and sky-high interest rates," Congresswoman Titus said. "With Nevadans struggling to make ends meet during this tough economic time and credit card debt at a record high, these fair, commonsense reforms will help consumers take hold of their financial future. By leveling the playing field, Nevadans will be in a position to make smart financial decisions that can save some families thousands of dollars in credit card debt."

The Credit Cardholders' Bill of Rights provides for important consumer protection reforms that are instituted 90 days, 9 months, and 15 months after enactment. Some of the key reforms that are taking effect include:

* Credit card companies must provide notice of any rate hike or change 45 days in advance.
* Interest rate increases are prohibited in most cases during the first year of the account.
* Account statements must be sent 21 days in advance of the due date.
* Credit card companies are restricted from allowing over-the-limit transactions without the card holders' knowledge.
* Due-date gimmicks such as setting morning times for payments, before mail is delivered, or charging fees for paying a bill by phone or Internet is prohibited.
* Recipients of gift cards are protected by requiring all gift cards to have at least a five-year life span and eliminating the practice of declining values and hidden fees for those cards.

In addition, on August 22 of this year, penalty fees will be required to be reasonable and proportional to the violation. Creditors will be required to periodically review all interest rate increases since January 2009 and reduce rates when a review indicates that a reduction is warranted. Additionally, the Electronic Fund Transfer Act will be amended to limit dormancy, inactivity, and service fees associated with gift cards. The Credit Cardholders Bill of Rights, which Titus voted for, is supported by a number of consumer organizations, public interest groups, and small business associations including the National Federation of Independent Businesses, Center for Responsible Lending, and U.S. PIRG.

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