Congressman Joe Baca (D-Rialto) called the Credit Cardholders’ Bill of Rights a major success for America’s consumers and pointed out that two additional provisions of the law went into effect Sunday, August 22.  The President signed the bill in May 2009 and most of the bill’s provisions became effective in August 2009 and February 2010.

“Studies show that the Credit Cardholders’ Bill of Rights will lead to billions of dollars in savings for America’s consumers each year,” said Rep. Baca.  “This translates into hundreds, if not thousands, of dollars in savings for individual households in the Inland Empire.  With full implementation of this law, we can better protect American consumers, and eliminate the bad apples whose predatory credit practices have already caused too much damage.”

In addition to the tough consumer protections that are already implemented, two additional provisions of the Credit Cardholders’ Bill of Rights go into effect:  1) requiring penalty fees for such things as late payments to be reasonable and proportional; and 2) requiring credit card companies, if they raise your interest rate, to re-evaluate that rate increase every 6 months and, if appropriate, reduce that rate within 45 days after completing the evaluation.

Some of the key consumer protections in the Credit Cardholders’ Bill of Rights that went into effect in August 2009 and February 2010 include:

Prohibits retroactive interest rate hikes on existing balances.

A recent report from the Pew Charitable Trust called the Credit Cardholders’ Bill of Rights “a major milestone in the move to make credit cards safer, transparent and more fair for consumers.”  In addition, a recent analysis by USA Today concluded that the new credit card protections, along with debit-card overdraft reforms recently instituted by the Federal Reserve, will save U.S. consumers at least $5 billion in fees this year alone.

“These new provisions require all penalty fees by credit card companies to be reasonable and proportional,” concluded Rep. Baca.  “This is another key protection for American families, and will help to ensure consumers no longer face disproportionate penalties by creditors.  I am committed to continuing my efforts to level the playing field, and better protect all Americans from the predatory practices of big banks.”