Credit CARD Act of 2009

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Credit Card Accountability Responsibility and Disclosure Act of 2010
Great Seal of the United States.
Long title An Act to amend the Truth in Lending Act to establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan, and for other purposes.
Enacted by the  111th United States Congress
Effective February 22, 2010
Citations
Public Law 111-24
Stat. 123 Stat. 1734 through 123 Stat. 1766
Codification
Act(s) amended Truth in Lending Act
Fair Credit Reporting Act
Electronic Fund Transfer Act
Omnibus Appropriations Act, 2009
Title(s) amended Titles 5, 11, 15, 20 and 31
Legislative history
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The Credit Card Accountability Responsibility and Disclosure Act of 2009 or Credit CARD Act of 2009 is a federal statute passed by the United States Congress and signed by President Barack Obama on May 22, 2009. It is comprehensive credit card reform legislation that aims "...to establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan, and for other purposes."[1] The bill was passed with bipartisan support by both the House of Representatives and the Senate.

Introduction and votes[edit]

The Credit Cardholders' Bill of Rights was introduced in the 110th Congress as H.R. 5244 in the House of Representatives by Representative Carolyn Maloney, a Democrat from New York and the chair of the House Financial Services Committee's Subcommittee on Financial Institutions and Consumer Credit. The bill had passed 312 to 112 but was never given a vote in the Senate.

In the 111th United States Congress the bill was reintroduced as H.R. 627 and on April 30, 2009, the House passed 357 yes votes to 70 no votes. The Senate followed suit and passed an amended version on May 19 with 90 yes votes and 5 no votes.[2] The House passed the amended bill the next day by a vote of 279 to 147 and it was signed into law by President Barack Obama on May 22, 2009.

The bill went into effect on February 22, 2010, nine months after it was enacted.

Provisions[edit]

The Credit Cardholders' Bill of Rights includes several provisions aimed at limiting how credit card companies can charge consumers but does not include price controls, rate caps, or fee settings.[3]

Amendment on guns in national parks[edit]

Gun rights advocates in the Senate, led by Tom Coburn (R-Okla) added an unrelated rider to the bill to prevent the Secretary of the Interior from enforcing any regulation that would prohibit an individual from possessing a firearm in any unit of the National Park System or the National Wildlife Refuge System.[4][5] The Senate passed the amendment 67-29.[6][7]

This amendment overturns a Reagan-era policy prohibiting firearms from being carried in national parks. The George W. Bush administration had attempted to implement a similar policy through the rulemaking process just before leaving office, but the change was struck down by a federal judge. The provision has been heavily criticized by environmentalists, anti-gun groups, and park supporters, including the Coalition of National Park Service Retirees, but it was applauded by gun rights groups.[7][8]

Criticism[edit]

Elizabeth Warren delivers the keynote speech entitled "The CARD Act: One Year Later" at an evaluation symposium held February 22, 2011

The act was not expected to affect existing credit card contracts.[9] However, the act that was passed applies to contracts made in the past by setting an effective date of February 22, 2010, which gave banks time to prepare and notify their customers. While it is a common criticism that the CARD Act led banks to raise interest rates and limit credit availability in response to its passage, studies by CardHub.com[10] and the Center for Responsible Lending[11] revealed that such trends were merely the result of economic pressures typical of a recession and not the law. Actually, according to these studies, historical economic data shows that the interest rate increase and decline in available credit seen during the Great Recession should have been worse considering the widespread unemployment, credit card delinquency and credit card charge-offs.[10][11]

In a speech on the one-year anniversary of the CARD Act, Special Adviser Elizabeth Warren said that "much of the [credit card] industry has gone further than the law requires in curbing re-pricing and overlimit fees."[12] However, she said there was still much work to be done, that the Consumer Financial Protection Bureau's "next challenges will be about further clarifying price and risks and making it easier for consumers to make direct product comparisons."[13][14][15]

In 2012, many stay-at-home mothers complained that because they have no individual income, the act prevents them from acquiring credit cards without their husbands' permission.[16] As of September 21, 2012, the CFPB announced that they would be making the change[which?] due to a petition on Change.org.[17]

Sponsors and cosponsors[edit]

The bill was cosponsored by House Financial Services Committee chair Barney Frank and Representatives Maxine Waters, Luis Gutiérrez, Stephen Lynch, Keith Ellison, Steve Cohen, Chaka Fattah, Maurice Hinchey, Jim Langevin, Jerrold Nadler, Carol Shea-Porter, Hilda Solis, Peter Welch, Albert Wynn, Peter DeFazio, Charles Gonzalez, Gene Taylor, David Obey, Mazie Hirono, Debbie Wasserman Schultz, Nancy Boyda, John Dingell, Corrine Brown, Bennie Thompson, Alcee Hastings, Yvette Clark, Jesse Jackson, Danny Davis, Kirsten Gillibrand, Eddie Bernice Johnson, Diane Watson, Michael Arcuri, Eliot Engel, John Tierney, Chris Van Hollen, George Miller, Jim Moran, Anthony Weiner, Neil Abercrombie, and Jan Schakowsky.

References[edit]

  1. ^ "Text of H.R. 627 (111th)". Govtrack.us. Retrieved 28 March 2012. 
  2. ^ http://www.govtrack.us/congress/vote.xpd?vote=s2009-194
  3. ^ Public Law Summary by Congressional Research Service, THOMAS, Library of Congress
  4. ^ Title.V. Section.512. of Public Law 111-24
  5. ^ Amendment SA 1067 proposed by Senator Coburn to Amendment SA 1058 of HR 627
  6. ^ Lillis, Mike (2009-05-12). "Senate Approves Coburn Gun Amendment…in Credit Card Bill". The Washington Independent. Retrieved 2009-06-13. 
  7. ^ a b The New York Times. "Bill Changing Credit Card Rules Is Sent to Obama With Gun Measure Included". By Carl Hulse. Published: May 20, 2009
  8. ^ McGuire, Kim (2010-02-20). St. Louis Post-Dispatch http://www.stltoday.com/stltoday/news/stories.nsf/sciencemedicine/story/C3C0BD3CE784C5E3862576D000099E0D?OpenDocument |url= missing title (help). Retrieved 2010-03-18. [dead link]
  9. ^ "Bingaman backs Credit Card Reform". KRWG. 2009-05-11. Retrieved 2009-10-19. 
  10. ^ a b "Study: The CARD Act's Impact on Rising Interest Rates". CardHub.com. Retrieved 2011-06-23. 
  11. ^ a b "Credit Card Clarity: CARD Act Reform Works". Center for Responsible Lending. Retrieved 2011-06-01. 
  12. ^ Warren, Elizabeth (February 22, 2011). "The CARD Act: One Year Later". Remarks by Elizabeth Warren on The CARD Act. U.S. Department of the Treasury. Retrieved October 27, 2011. 
  13. ^ Saenz, Arlette (February 22, 2011). "Warren Praises Credit Card Industry for Transparency Efforts for Borrowers". ABC News. Retrieved October 27, 2011. 
  14. ^ Clarke, Dave; Aspan, Maria (February 22, 2011). "Credit cards still in US watchdog Warren's sights". Reuters. Retrieved October 27, 2011. 
  15. ^ Delaney, Arthur (February 18, 2011). "Elizabeth Warren: Shortcomings Of Credit Card Reform Show Need For CFPA". Huffington Post. Retrieved October 27, 2011. 
  16. ^ Ellis, Blake (May 16, 2012). "Stay-at-home mom fights new credit card rule". CNN Money. Retrieved May 16, 2012. 
  17. ^ McCall, Holly. "Don't set us back half a century! Give stay-at-home moms credit.". Retrieved May 16, 2011. 

External links[edit]