Titus-Supported Credit Card Reforms to Save Consumers $5 Billion in Fees This Year

Press Release

Congresswoman Dina Titus highlighted an analysis by USA Today that found that credit card reforms supported by Titus and passed by Congress will save consumers $5 billion in fees this year. The Credit CARD Act, which began to take effect earlier this year, provides tough new protections for consumers previously facing sky-high interest rates hikes and steep overdraft fees.

"For too long, consumers have been subjected to the whims of credit card companies and their unfair rate hikes and excessive fees that left Nevadans paying more," Congresswoman Titus said. "With credit card debt at a record high, this legislation levels the playing field between credit card companies and consumers by applying commonsense regulations and giving cardholders the information and rights they need to make smart financial decisions. The key provisions of this law will ensure that Nevadans keep more of their hard-earned money in their own pockets where it belongs rather than padding the bottom line of credit card companies."

Some of the key reforms that have already taken 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, are 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 CARD Act 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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