2009 - The Year of the Consumer

This article briefly summarizes major legislative and

regulatory initiatives through May 2009 that focus, at least in

part, on consumer affairs. If you would like more information on

any of these developments, please contact us.

Extension of the $250,000 Deposit Insurance Limit

The Helping Families Save Their Homes Act, enacted May 20, 2009,

extends the temporary increase in the standard maximum deposit

insurance amount to $250,000 per ownership through Dec. 31,

2013.

Credit CARD Act of 2009

Section 101 amends the Truth in Lending Act to require 45

days' advance notice of any increase in the APR or any other

significant change in the terms of a credit card account, together

with a notice that the consumer has a right to cancel further

advances, without paying off the balance, to avoid the new APR or

changed terms. Limits are placed on a creditor's rights to

increase the APR, and if a creditor increases the based on specific

factors, the creditor must also consider those factors in

determining whether to reduce the APR. Promotional rates must

remain in effect for at least six months, and the regular APR on a

new account may not increase for one year.

Section 102 sets limits on fees and interest charges, including

a prohibition against double-cycle billing and penalties for

on-time payments. It authorizes consumers to elect whether to

prohibit a creditor from completing any over-the-limit transactions

resulting in a fee. It allows an over-the-limit fee to be billed

only once unless the obligor obtains an additional extension of

credit in excess of the credit limit. It requires penalty fees to

be reasonable and obliges the Federal Reserve to adopt regulations

for determining what is reasonable.

Section 103 prohibits a creditor from using the term "fixed

rate" unless the credit card account maintains a fixed rate

over a specific period that is clearly and conspicuously identified

in the account terms.

Section 104 revises requirements for prompt and fair crediting

of card payments.

Section 106 requires the payment due date to be the same day

each month and requires that when a payment due date falls on a

weekend or holiday, the consumer shall be allowed to pay on the

next business day without being treated as paying late. Creditors

must deliver statements at least 21 days before the due date.

Section 109 requires card issuers to consider the consumer's

ability to make the required payments when opening a credit card

account or increasing the...

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