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A New Era for Credit Cards

The President signed sweeping regulations into place today
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It can be difficult to think of an issue that touches more people, or can get a rise out of more people, than credit card fine print, fees, and staggering interest rate hikes. For some it is an irritation, for others who may have already hit a rough patch, it can become a brutal weight.
But as the legislation the President signed today goes into effect, those problems will phase out as normal parts of life for our friends, our neighbors, our families or ourselves.   It is a sweeping bill -- as you read through the White House fact sheet on the details, you are sure to be reminded of a dozen angry or frustrated stories you have heard over the years. Just for starters, it bans unfair rate increases, prevents unfair fee traps, requires plain language in plain sight for disclosures, increases accountability all around, and institutes protections for students and young people.
Having recounted a few stories of hard-working people who took real hits, and a litany of ways credit card companies can find to take advantage, the President described the new rules:
So we're here to put a change to all that.  With this bill, we're putting in place some common-sense reforms designed to protect consumers like Janet.  I want to be clear about this:  Credit card companies provide a valuable service; we don't begrudge them turning a profit.  We just want to make sure that they do so while upholding basic standards of fairness, transparency, and accountability.  Just as we demand credit card users to act responsibly, we demand that credit card companies act responsibly, too.  And that's not too much to ask.
And that's why, because of this new law, statements will be required to tell credit card holders how long it will take to pay off a balance and what it will cost in interest if they only make the minimum monthly payments.  We also put a stop to retroactive rate hikes that appear on a bill suddenly with no rhyme or reason. 
Every card company will have to post its credit card agreements online, and we'll monitor those agreements to see if new protections are needed.  Consumers will have more time to understand their statements as well:  Companies will have to mail them 21 days before payment is due, not 14.  And this law ends the practice of shifting payment dates.  This always used to bug me -- when you'd get like -- suddenly it was due on the 19th when it had been the 31st.
Lastly, among many other provisions, there will be no more sudden charges -- changes to terms and conditions.  We require at least 45 days notice if the credit card company is going to change terms and conditions.
So we're not going to give people a free pass; 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.
And this is a difficult time for our country, born in many ways of our collective failure to live up to our obligations -- to ourselves and to one another.  And the fact is, it took a long time to dig ourselves into this economic hole; it's going to take some time to dig ourselves out.
But I'm heartened by what I'm seeing:  by the willingness of old adversaries to seek out new partnerships; by the progress we've made these past months to address many of our toughest challenges.  And I'm confident that as a nation we will learn the lessons of our recent past and that we will elevate again those values at the heart of our success as a people:  hard work over the easy buck, responsibility over recklessness, and, yes, moderation over extravagance.
President Obama signs credit card reform legislation
(President Barack Obama and a bipartisan group of lawmakers applaud after the President signed the Credit Card Accountability, Responsibility and Disclosure Act in the Rose Garden of the White House Friday, May 22, 2009. Official White House photo by Chuck Kennedy)