Federal Reserve Implements CARD Act Provisions
The Federal Reserve Board announced January 12, 2010, the approval of implementing provisions of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) into the final rules. The CARD Act will go into effect July 1, 2010.
Provisions of the CARD Act include prohibition of rate increases during the first year an account is opened, as well as increases in rates on existing credit card balances. Consumers younger than 21-years-old will not be issued credit cards unless the consumer has the means to make required payments or receives a parent or other cosigner with means to do so. Creditors are prohibited from allocating payments to maximize interest charges, and charging over-the-limit fees before obtaining a consumer’s consent.
The new rules affect the Truth in Lending, which applies to credit cards and mortgage loans.