President Obama Signs Credit Card Act of 2009
On May 27, 2009, President Obama signed into law the Credit Card Act of 2009 (“Act”). This Act amends the Truth-in-Lending Act to make sweeping changes to the terms offered and disclosures provided by consumer credit card issuers. The Act also contains new federal restrictions on gift cards, gift certificates and some pre-paid cards. The provisions of the Act regarding advance notice of rate increases and other changes in account terms, as well as the provisions regarding the timing of periodic statements, take effect in 90 days. The provisions on interest rate reductions, reasonable and proportionate fees, and restrictions on gift cards and pre-paid cards become effective in 15 months. The remaining provisions become effective in nine months. The Act charges the Federal Reserve Board (“FRB”) with drafting the implementing regulations. To some extent, the Act modifies and expedites the FRB’s credit card rule changes that were to take effect on July 1, 2010.