Regulations for credit cards may be moved up

11.06.09
By Lewis Green

New rules governing credit cards may end up being moved up as the House moved to change the effective date of the Credit Card Accountability, Responsibility and Disclosure Act.

Originally, rules put forward by the Credit CARD Act were set to come into effect next year. However, representatives have voted to change the date. If the bill passes the Senate, regulations from the act would take effect once President Barack Obama inks his name on the legislation.

House Speaker Nancy Pelosi said that the effective dates were intended to give companies that offer credit cards time to prepare for the new rules. However, many card companies have raised interest rates and fees in anticipation to the Credit CARD Act, which prompted the House to action.

"The credit card companies proved that treating their customers fairly takes a back seat to the blind pursuit of profit," Pelosi said. "This is why the House, with an overwhelming bipartisan vote, acted to protect consumers against abusive and predatory credit card practices that don't belong in a fair, transparent and responsible consumer financial marketplace."

Some of the rules that would take immediate effect including preventing arbitrary increases for interest rates and fees associated with credit card debt. Furthermore, companies would have to review accounts that have seen rates or fees increased since January, 2009 and, if warranted, would be required to reverse those increases.

While Congress continues to debate moving rules for credit cards, Connecticut Democratic Senator Chris Dodd has presented legislation that would put a freeze on rate and fee increases. The freeze would be in effect until new rules from the Credit CARD Act are in place.

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The House passed a bill that would make rules for credit cards take effect sooner.