AP Photo/Haraz N. Ghanbari
President Barack Obama signs the Credit Card Accountability, Responsibility and Disclosure Act, Friday, May 22, 2009, in the White House Rose Garden.
With a bipartisan group of lawmakers behind him in the White House Rose Garden, President Barack Obama signed the Credit Card Accountability Responsibility and Disclosure Act of 2009 legislation meant to protect consumers from financial industry practices which critics contend trap card users under mountains of debt.
"We're not going to give consumers a free pass," Obama said before he signed the bill. "We expect consumers to live within their means and pay what they owe. But we also expect financial institutions to act with the same sense of responsibility that the American people aspire to in their own lives."
Consumer Union provides a good breakdown of what's in the legislation:
* Requires issuers to disclose the period of time and total interest it will take to pay off the card balance if only minimum monthly payments are made.
* If the interest rate increases because the minimum payment is not received within 60 days after the due date, the rate must go back to the original lower rate if the consumer makes on time minimum payments for 6 months.
* No over-the-limit fees may be charged unless the consumer has asked for the account to be set up to allow transactions which will exceed the credit limit.
* Prohibits credit card issuers from setting early deadlines for payments. Payments must be received by 5:00pm at a location set by the issuer.
* Due dates will be on the same day each month.
* The rule prohibits card issuers from treating a payment as late unless the bill is mailed or delivered at least 21 days before the due date.