Prevents Unfair Increases in Interest Rates and Changes in Terms

  • Prohibits arbitrary interest rate increases and universal default on existing balances; Requires
  • a credit card issuer who increases a cardholder’s interest rate to
  • periodically review and decrease the rate if indicated by the review;Prohibits credit card issuers from increasing rates on a cardholder in the first year after a credit card account is opened; Requires promotional rates to last at least 6 months.

Prohibits Exorbitant and Unnecessary Fees

  • Prohibits
  • issuers from charging a fee to pay a credit card debt, whether by mail,
  • telephone, or electronic transfer, except for live services to make
  • expedited payments; Prohibits
  • issuers from charging over-limit fees unless the cardholder elects to
  • allow the issuer to complete over-limit transactions, and also limits
  • over-limit fees on electing cardholders; Requires penalty fees to be reasonable and proportional to the omission or violation; Enhances protections against excessive fees on low-credit, high-fee credit cards.

Requires Fairness in Application and Timing of Card Payments

  • Requires payments in excess of the minimum to be applied first to the credit card balance with the highest rate of interest;Prohibits issuers from setting early morning deadlines for credit card payments;Requires credit card statements to be mailed 21 days before the bill is due rather than the current 14.

Protects the Rights of Financially Responsible Credit Card Users

  • Prohibits interest charges on debt paid on time (double-cycle billing ban); Prohibits late fees if the card issuer delayed crediting the payment; Requires that payment at local branches be credited same-day; Requires
  • credit card companies to consider a consumer’s ability to pay when
  • issuing credit cards or increasing credit
  • limits.

Provides Enhanced Disclosures of Card Terms and Conditions

  • Requires cardholders to be given 45 days notice of interest rate, fee and finance charge increases;Requires issuers to provide disclosures to consumers upon card renewal when the card terms have changed;Requires
  • issuers to provide individual consumer account information and to
  • disclose the period of time and total interest it will take to pay off
  • the card balance if only minimum monthly payments are made;Requires full disclosure in billing statements of payment due dates and applicable late payment penalties.

Strengthens Oversight of Credit Card Industry Practices

  • Requires
  • each credit card issuer to post its credit card agreements on the
  • Internet, and provide those agreements to the Federal Reserve Board to
  • post on its website;Requires
  • the Federal Reserve Board to review the consumer credit card market,
  • including the terms of credit card agreements and the practices of
  • credit card issuers and the cost and availability of credit to
  • consumers;Requires Federal Trade Commission rulemaking to prevent deceptive marketing of free credit reports.

Ensures Adequate Safeguards for Young People

  • Requires
  • issuers extending credit to young consumers under the age of 21 to
  • obtain an application that contains: the signature of a parent,
  • guardian, or other individual 21 years or older who will take
  • responsibility for the debt; or proof that the applicant has an
  • independent means of repaying any credit extended; Limits prescreened offers of credit to young consumers;Prohibits
  • increases in the credit limit on accounts where a parent, legal
  • guardian, spouse or other individual is jointly liable unless the
  • individual who is jointly liable approves the increase; Increases
  • protections for students against aggressive credit card marketing, and
  • increases transparency of affinity arrangements between credit card
  • companies and universities.

Enhanced Penalties

  • Increases existing penalties for companies that violate the Truth in Lending Act for credit card customers.

Gift Card Protections

  • Protects
  • recipients of gift cards by requiring all gift cards to have at least a
  • five-year life span, and eliminates the practice of declining values
  • and hidden fees for those cards not used within a reasonable period of
  • time.

Encourages Transparency in Credit Card Pricing

  • Requires
  • the GAO to study the impact of interchange fees on consumers and
  • merchants, specifically their disclosure, pricing, fee and cost
  • structure.

Protects Small Businesses

  • Requires
  • the Federal Reserve to study the use of credit cards by small
  • businesses and make recommendations for administrative and legislative
  • proposals;Establishes Small Business Information Security Task
  • Force to address the information technology security needs of small
  • businesses and help prevent the loss of credit card data.

Promotes Financial Literacy

  • Requires
  • comprehensive summary of existing financial literacy programs and
  • development of strategic plan to improve financial literacy education.

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