WASHINGTON - Rep. Edolphus “Ed” Towns (NY-10) announced that landmark reforms to the credit card industry will go into effect today thanks to the Credit CARD Act. The law, which this Congress passed and was signed into law by President Obama last year, will end unfair industry practices and protect consumers from abusive tactics like retroactive rate increases, misleading late fee charges and over-limit fee traps.  

“When so many American families are struggling to make ends meet, consumers deserve to be treated fairly by their credit card companies,” said Rep. Towns. “That’s what this new law will do: level the playing field for consumers.”

The Credit CARD Act bans retroactive interest rate hikes on existing balances (except when payments are more than 60 days late), double-cycle billing and due-date gimmicks. Consumers will save at least $10 billion a year from curbs on interest rate increases alone, according to the Pew Charitable Trust which tracks credit card issues.

This new law is part of this Congress’s long-term plan to rebuild the economy in a way that works for middle-class families and rewards responsibility and hard work – not high-flying finance schemes.

As Chairman of the House Committee on Oversight and Government Reform, Rep. Towns has launched several investigations into the financial crisis and has examined what happened on Wall Street that led to the financial crisis.  Rep. Towns believes that these new regulations will prevent the credit card industry from continuing the predatory practices that defined the previous decade.

Specifically, the law increases notice of any future rate hikes on new purchases to 45 days, requires credit card companies to fairly credit and allocate payments and prohibits charging fees just to pay a bill by phone. It also protects young consumers by requiring a parent to co-sign or an ability to pay must be demonstrated before cards can be issued to anyone under 21.

“The people of the 10th District deserve fair treatment from their credit card companies. The Credit CARD Act gives Americans the information and rights they need to make smart, informed decisions about their financial lives,” said Rep. Towns.

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Return to Congressman Towns' website