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(Washington, D.C.) - U.S. Senator Jeanne Shaheen applauded bipartisan Senate passage today of the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009, which will protect consumers by establishing fair and sensible rules for how and when credit card companies can raise interest rates, cracking down on abusive fees, and requiring fair consumer notification related to payoff timing, late payment deadlines and penalties. Revolving consumer credit in the U.S. has quadrupled over the past 20 years, rising to $977 billion last September at the beginning of the economic crisis as families struggled to make ends meet. The CARD Act takes yet another step on the path to economic recovery by ensuring families who are forced to rely on credit in this economy are not victims of the growing credit industry practice of deceptive fees and terms.

"Too many middle class families are forced to rely on credit to make ends meet during this difficult economy, and this bipartisan legislation makes sure consumers are protected from unscrupulous and deceitful credit card company practices," said Shaheen. "The CARD Act is another step toward getting our economy back on track by helping to protect middle class families and consumers. I commend Chairman Dodd and ranking member Shelby for their leadership on this issue, and I look forward to working with my colleagues on both sides of the aisle as we continue our efforts to restore our economy."

In addition to supporting the CARD Act, Shaheen is working through the U.S. Senate Committee on Small Business and Entrepreneurship with Chair Mary Landrieu and ranking member Olympia Snowe on legislation that would extend protections of the CARD Act to small business owners.

According to, the average U.S. household that carries a credit card balance owes close to $10,000 in revolving debt on their credit cards, and 13% of Americans carry credit card balances above $25,000. The CARD Act responds to this growing debt by restoring fairness and commonsense to the credit card industry, protecting consumers by cracking down on exorbitant fees and requiring advance notification for changes to the card contract. The CARD Act passed the Senate today with broad bipartisan support 90-5.


Major provisions of the CARD Act include:

Cracking Down on Exorbitant Fees

  • Double-cycle billing. The CARD Act prohibits double-cycle billing, the practice by which consumers are charged based on their average balance from the previous two months instead of just the last month. The CARD Act prevents credit card issuers from imposing interest charges on any portion of a balance in the current billing cycle that is paid by the due date.
  • Overlimit fees. Instead of declining further charges when a consumer has reached the card limit, many credit card companies now charge overlimit fees, which will often repeat each month until the consumer's balance is paid down sufficiently. The CARD Act prohibits companies from charging overlimit fees unless the consumer has expressly elected to permit the issuer to complete a transaction beyond the limit of the account.
  • Other fees. Many companies charge consumers if they elect to pay off their balance using particular methods. The CARD Act prohibits credit card issuers from charging a fee on payments by mail, telephone, electronic transfer, or other methods, except for expedited service by a live service representative.
  • Penalty fees. The CARD Act requires penalty fees to be reasonable and proportional to the omission or violation.


Advance Notification for Consumers

  • Changes to annual percentage rates. The CARD Act requires that cardholders be given 45 days notice of any interest rate, fee or finance charge increase, advance notice of any significant change in terms of the credit card account, and clear notice of right to cancel the card when the APR is raised or significant terms are changed.
  • Universal default increases. Some credit card issuers increase interest rates if the cardholder makes a late payment on any account, not just the account of the card issuer. The CARD Act prohibits this practice of universal default increases on existing balances.
  • Other increases. The CARD Act prohibits rate, fee, or finance charge increases on existing balances except when an introductory rate expires.
  • Initial rates for new cards. The CARD Act prohibits credit card issuers from increasing rates on a cardholder in the first year after a credit card account is opened and requires promotional rates to last at least six months.

Enhanced Oversight of Credit Card Industry

  • Enhanced penalties. The CARD Act increases existing penalties for companies that violate the Truth in Lending Act for credit card customers.
  • Internet posting of credit agreements. The CARD Act requires each credit card issuer to establish and maintain an Internet site posting the written credit card agreements and its credit card agreements to the Federal Reserve Board in electronic format. The Federal Reserve Board is required to establish and maintain on its publicly available website a central repository of the consumer credit card agreements.