Changes to Credit Card Regulations
Question Changes to Credit Card Regulations Answer
In May 2009, the Credit Card Accountability Responsibility and Disclosure Act of 2009
(Credit Card Act) amended the Truth in Lending Act (Regulation Z) and other statutes,
which provide rules that are intended to better protect credit card users by prohibiting
certain unfair acts or practices. These statutes also aim to improve the disclosures
consumers receive in connection with credit card accounts and other revolving credit
plans.
The Federal Reserve Board approved an interim final rule in July 2009, amending
Regulation Z to require creditors to increase the amount of notice consumers receive
before the rate on a credit card account is increased or a significant change is made to
the account's terms. The amendments also allow consumers to reject such increases
and changes by informing the creditor before the increase or change goes into effect.
This rule implements the provisions of the Credit Card Act that went into effect on August
20, 2009. You may wish to view the July 2009 press release on the regulation changes.
Under the rule:
• Creditors must provide written notice to consumers 45 days before the creditor
increases an annual percentage rate on a credit card account or makes a significant
change to the terms of a credit card account.
• Creditors must inform consumers in the same notice of their right to cancel the
credit card account before the increase or change goes into effect. If a consumer does
so, the creditor is generally prohibited from applying the increase or change to the
account.
• Creditors generally must mail or deliver periodic statements for credit cards and
other open-end consumer credit accounts at least 21 days before payment is due.
The remaining provisions of the Credit Card Act's amendments to Regulation Z go into
effect on February 22 or August 22, 2010, and will be implemented by the Federal
Reserve Board at a later date.
____________________________________________________________________