The Federal Reserve Board has issued an interim final rule which implements certain provisions of the recently enacted Credit Card Accountability Responsibility and Disclosure Act of 2009 (the "Credit CARD Act"). The interim final rules put into place certain requirements of the Credit CARD Act which will go into effect on August 20, 2009. For a summary of the Credit CARD Act, please see our previous Consumer Financial Services Alert dated May 26, 2009, a copy of which is attached.
The following provisions of the Credit CARD Act go into effect August 20, 2009:
- Creditors must provide written notice to consumers 45 days before the creditor increases an annual percentage rate on a credit card account or makes a significant change to the terms of a credit card account.
- Creditors must inform consumers in the same notice of their right to cancel the credit card account before the increase or change goes into effect. If a consumer does so, the creditor is generally prohibited from applying the increase or change to the account.
- Creditors generally must mail or deliver periodic statements for credit cards and other open-end consumer credit accounts at least 21 days before payment is due.
The remaining provisions of the Credit CARD Act go into effect on either February 22, 2010 or August 22, 2010. We will keep you apprised of the final rules for the remaining provisions of the Credit CARD Act as they are released.