Patrick Murphy Announces New Consumer Protections in Effect
New protections now in effect as a result of the Credit Cardholders’ Bill of Rights passed last year
(Bristol, PA) – Today Pennsylvania Congressman Patrick Murphy (D-8th District) announced that two provisions of the Credit Cardholders’ Bill of Rights are going into effect this week. The President signed the bill in May 2009 and most of the bill’s provisions became effective in August 2009 and February 2010.
“I fought for this law to protect families from abusive practices by credit card companies, like hidden feeds and unreasonable, confusing penalties,” said Murphy. “These new protections tell credit card companies: enough is enough.”
In addition to the tough consumer protections that are already implemented, two additional provisions of the Credit Cardholders’ Bill of Rights go into effect this week:
- requiring penalty fees for such things as late payments to be reasonable and proportional; and
- requiring credit card companies, if they raise your interest rate, to re-evaluate that rate increase every 6 months and, if appropriate, reduce that rate within 45 days after completing the evaluation.
Some of the key consumer protections in the Credit Cardholders’ Bill of Rights that went into effect in August 2009 and February 2010 include:
- Prohibits retroactive interest rate hikes on existing balances.
- Bans double-cycle billing (charging interest twice on balances paid on time).
- Ensures fairness of due dates, including requiring statements be mailed 21 days in advance of the payment date and requiring the payment date to remain the same each month.
- Requires 45-days’ advance notice of interest rate, fee and finance charge hikes.
- Strengthens credit card protections for young people.
- Requires that billing statements from credit card companies be clear, be in plain English, and show how long a balance will take to be fully paid off if only the minimum payment is made.
A recent report from the Pew Charitable Trust called the Credit Cardholders’ Bill of Rights “a major milestone in the move to make credit cards safer, transparent and more fair for consumers.” In addition, a recent analysis by USA Today concluded that the new credit card protections, along with debit-card overdraft reforms recently instituted by the Federal Reserve, will save U.S. consumers at least $5 billion in fees this year alone.
“Requiring penalty fees by credit card companies to be reasonable and proportional is another key protection for America’s consumers, ensuring that they no longer face disproportionate penalties by creditors,” Murphy concluded.