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Credit
Card Rules Passed to Protect Consumers Impact Institutions (cont'd)
·
Ensures
Adequate Safeguards for Young People
– places specific requirements issuers must meet before extending
credit to consumers under age of 21; limits prescreened offers to
young consumers; prohibits increases in credit limit on accounts
when someone else is jointly liable without that person’s consent;
and increases protections for students against aggressive card
marketing and increases transparency of affinity arrangements
between card companies and universities.
·
Enhanced
Penalties –
increases existing penalties for companies that violate the Truth
in Lending Act for credit card customers.
·
Gift
Card Protections –
requires gift cards to have at least a five-year life span;
eliminates the practice of declining values and hidden fees for
cards not used within a reasonable period of time.
·
Encourages
Transparency in Credit Card Pricing
– Requires the Government
Accountability Office to study the impact of interchange fees on
consumers and merchants, specifically their disclosure, pricing, fee
and cost structure.
·
Protects
Small Businesses
– requires the FRB to study the use of credit cards by small
businesses and make recommendations for administrative and
legislative proposals; and establishes Small Business Information
Security Task Force to address the information technology security
needs of small business and help prevent the loss of credit card
data.
·
Promotes
Financial Literacy
– requires comprehensive summary of existing financial literacy
programs and development of a strategic plan to improve financial
literacy education.
The
Credit CARD Act is
available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills
&docid=f:h627enr.txt.pdf.
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