Sen. Robert Menendez joins President Barack Obama for the signing of the credit card reform law in the White House Rose GardenLANDMARK CREDIT CARD REFORM SIGNED INTO LAW
This new law includes important and unprecedented protections for consumers that will end a number of deceptive and predatory practices, many of which I am proud to have had a hand in drafting. We are ending surprise and unjustified interest rate increases, changes to contracts, unreasonable penalties for consumers and opportunities for card companies to prey on unsuspecting young consumers, just to name a few. Credit card company abuses have reached a point where families feel like a trap door is going to open up beneath them every time they swipe a card. It was crucial to do everything within our reach to protect consumers from falling further into debt as a result of these practices. For years, it has been a main priority of mine to help put an end to the tricks and traps that many credit card companies use to boost interest rates and fees. I authored the Credit Card Reform Act, and was a lead co-sponsor of Senator Dodd’s legislation that eventually passed the Senate. Much of the Credit Card Reform Act is mirrored in the new law, and I was proud to also help add major provisions, including:
Protection of college students and other consumers under the age of 21 by requiring them to proactively opt in to receiving credit card solicitations rather than automatically receiving them, as is now the case
Requiring credit card companies to consider an applicant’s financial ability to pay for the credit card before giving approval or raising the limit, much like new regulations in the mortgage system
Prohibiting credit card companies from giving away free merchandise on college campuses in exchange for filling out a card application and requiring public posting of deals between credit card companies and colleges that may provide the card companies with student data
Requiring companies that charge payments but advertise “free” credit reports to disclose, “This is not the free credit report provided for by federal law”.
We sought to finally make things fair between credit card holders and credit card companies. With this bill, the trap doors are being sealed shut, the booby traps are being dismantled and the erasable ink is being poured down the drain.