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...
To continue reading
Request your trial