Both consumers and credit card customers scratched their heads over the timing of the Credit Card Reform Act – it doesn’t kick in until February 2010. Why the delay? Nobody seems to know for sure. Now, Congress is revisiting the issue – and is exploring the notion of triggering the new law in December.
Congress passed the Credit Card Reform Act in the spring, and President Obama was quick to sign it into law. But one big loophole in the bill gave card companies almost a full year to veer a new, more favorable course on late fees and credit limits – card features that were targeted by lawmakers when the bill was finalized. In essence, the card industry had ample time to readjust due date cycles, hike interest rates and penalize cardholders even more onerously on late payment billings before the February 2010 deadline.
The Washington-based Center for Responsible Lending, says that even in the face of legislative and regulatory change, top credit card issuers have chosen to increase fees and raise rates for more customers, including those in good standing.
To cut into the time credit card companies are using to cash in on the old, pre-reform rules, U.S. Representatives Carolyn Maloney and Barney Frank intend to speed things up by changing the trigger date to Dec. 1 from the current Feb. 22, 2010 timetable.
"Since the signing of my bill by the President on May 22, too many credit card companies have used the period to raise rates and fees in a way that would be banned come February," Maloney said in a statement prior to the release. "I believe they're taking advantage and using the time before the effective date badly. Changing the effective date to December 1st is both warranted and wise."
The consumer advocacy group CRL agrees, citing some sleight of hand moves by card issuers to take advantage of the current nine-month window between approval and enactment of the new reform legislation.