^[2] At the beginning of Summer 2009, our government passed bipartisan Credit CARD Legislation ^[3] to protect consumers from credit card ^[4] companies. I was a little skeptical then and that hasn’t abated too much. Why? Most of the legislation hasn’t gone into force. My question then was the same as it is now – if the bill is so desperately needed, and I believe it was, why wait so long to enforce it?

The Credit Card ^[4] Accountability, Responsibility and Disclosure (CARD) Act of 2009 ^[5] DID have a few provisions that went into effect immediately:

• Payment due dates must be at least 21 days after mailing the statement.
• APR ^[6] increases, delinquency rate increases, and other “significant changes” require a 45 day notice.
• After any “significant change” (including delinquency rate increases), consumers have the right to cancel the card.

On February 22, 2010, several more key changes will go into effect.

Here are the differences you may notice:

• Say goodbye to “No Payment” promotions. They’re gone. A monthly payment must be made in all cases.
• Say goodbye to financing promotions less than 180 days. Ninety days same as cash is a thing of the past.
• No account can be “re-priced” (industry jargon for a rate increase) without a 60 day notice.
• Payment due dates must remain fixed (no monkey-ing around with the due date).
• Any payments received in excess of the minimum payment must be applied to the highest APR ^[6] amounts first.
• If going over the credit limit automatically incurs a fee, the consumer must be allowed to opt-in or opt-out first.
• Making a payment (except “expedited” payments) won’t incur a fee – some lenders were charging a fee if you paid over the phone, online, by mail, by check, you-name-it just to increase their collected fees.
• Terms and annual percentage rates must be disclosed at the point of sale for every transaction.
• A co-applicant is required for minors and students under the age of 21.
• Income is required for ALL applicants.
• Fees and interest cannot increase for the first year.
• Each statement must have a large, easy to identify minimum payment warning.
• Cardholder agreements must be posted online.

Later in 2010 (July 1) there are another set of rules that card issuers must abide by:

• Say goodbye to “fine print.” From July 1 forward, disclosures must be the same font size as the promotional offer. Issuers are still awaiting a ruling on this because the amount of new regulation will make any offer unrecognizable.
• All statements must use a standardized format (to be determined).
• On the first page of this new statement, issuers must have
  • 1. Promotions
    2. Late payment warnings
    3. Minimum number of payments to payoff
    4. Delinquency trigger warnings
    5. Any changes in terms
    6. Minimum payment warning on the remittance stub
• On another page, issuers must list the interest and fees paid year to date.
• All pages will have a standardized name. For example, Acct Activity will now be called Transaction Summary and Finance Charge Summary will become Interest Charge Calculations.
• Statements must have instructions on how to handle billing disputes and resolutions.

Regulators are expected to be tough. How tough is anyone’s guess but if they behave like most government employees, there will be a wide variety in how the regulations are enforced. That’s just how it is.