Consumers to Benefit from Final Implementation of Credit CARD Act of 2009; Pew Urges Additional Action from Federal Reserve

Washington, DC — Nick Bourke, director of the Pew Health Group's Safe Credit Cards Project, today issued the following statement in response to the final rules under the Credit CARD Act of 2009, which will take effect Sunday, August 22.

“Thanks to the Credit CARD Act, millions of consumers can enjoy credit cards that are safer and more transparent. Pew's research has shown that since the legislation has taken effect many ‘unfair or deceptive' practices have disappeared from the marketplace.

“During a time of sluggish economic growth, the Act is helping Americans to better manage their credit card accounts.  Due to the legislation, hair trigger retroactive penalty rates have been eliminated and more cardholders have kept up with their payments. Federal Reserve data show that delinquency rates have steadily decreased as major provisions of the Credit CARD Act were being implemented.

“While we applaud the final implementation of this important legislation, more should be done to protect customers from harmful credit card practices.  In its latest rules, the regulators missed a chance to form comprehensive penalty interest rate protections.  Though the rules created some important safeguards, the Federal Reserve refused to control the size or duration of penalty rate increases on existing balances.  We urge them to ensure that all credit card penalties are reasonable and proportional.”