Credit Card Accountability, Responsibility and Disclosure Act of 2009

President Obama just signed the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (Credit CARD Act). We have discussed in length what the legislation will do in previous posts so feel free to read them over if you haven’t done so already.

What we have not done is discuss exactly what and when the various pieces of the legislation go into effect. Let us now take a look at the various stages of the legislation and how it will be phased into law over the next 15 months.

The first piece of legislation will be in place by August 20, 2009 and it calls for card issuers to give 45 day notice whenever they make any changes to the terms of service of their credit cards.

August 20th also will see a change in the deadline for cardholders to pay their monthly bills. At this time credit card account holders have 14 days to pay their bills. The new legislation will give cardholders 21 days to submit payments.

February 22, 2010 is when the vast majority of consumer protection facets of the Credit CARD Act will take effect. These consumer protections include placing limits on interest rate increases, getting rid of double cycle billing and placing restrictions that would make it more difficult for minors to get credit cards.

These provisions actually came under fire by many consumer groups that argued that putting them off until February 22nd of next year offers no assistance or relief for consumers that are struggling and need help right now.

Two other provisions that haven’t gotten much ink will go into effect on August 22, 2010. The first being that gift cards must be valid for no less than five years and the second is the restoration of interest rates to prior levels when credit card holders prove to act responsibly in repaying what they owe.

These are the combined efforts of the House and Senate and they overlap with new laws that were recently approved by the Federal Reserve Board. Those laws will not go into effect until July 1, 2010.

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