CARD Reform

The U.S. Senate passed by 90-to-5 Tuesday the Credit Card
Accountability Responsibility and Disclosure Act. It will
help end to deceptive practices and hidden fees by credit
card companies and protect families here in Oregon and
around the U.S..

Our Sen. Jeff Merkley, a co-sponsor, urged the White House
to support strong consumer protections. He is to be
applauded, with others who pushed this reform.

The CARD (Credit Accountability Responsibility and
Disclosure) Act will end practices that wipe wallets clean
of green for families already in economic crises.

Credit card companies have been blitzing consumers with new
practices and fees. Recently they have increased late and
balance transfer fees, applied fees for non-use of cards and
increased minimum payments. Those fees are substantial,
making it nearly impossible for those struggling with large
balances to pay them down.

The Federal Reserve has issued new regulations addressing
some abuses, but those reforms would not take effect until
July 2010 – too late for many consumers debt-ridden because
of the economic crunch.

The Credit CARD Act would speed and strengthen reforms of
the industry by:

Prohibiting “universal default” on existing
balances, the practice of raising interest rates for actions
unrelated to the card in question;

Requiring payments beyond the minimum monthly payment be
applied to balances with the highest rate of interest;

Prohibiting fees based on the method of payment, be it by
mail, Internet or other;

Halting late fees if the card issuer delayed crediting the

Requiring card companies who increase a cardholder’s
interest rate to review that decision in six months and
decrease the rate if warranted;

Requiring that consumers affirmatively “opt-in”
to over-the-limit plans; and

Limiting the aggressive solicitation of young people.

Are these regulations enough? Probably not. But they are a
start. People need help to gain footing on a narrow credit