Signed into law May 22, 2009, by President Obama, parts of the new Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 will go into effect in February. The purpose of Congress’ reform is to protect consumers against acts that the Federal Reserve calls “unfair or deceptive.”
Some banks implemented changes in anticipation of the final legislation going into effect. You may have already been affected in the form of rising rates and fees, decreased credit limits and canceled lines of credit, without cause.
The good news is that, for the most part, we already meet the majority of the new requirements. While other institutions are raising rates and adding fees, we are still providing honest value. We still offer the same rate for purchases, cash advances and balance transfers. Unlike the big bank credit cards, we have no cash advance fee, no balance transfer fee and no default APR – meaning, we won’t raise your rate if you make a late payment.
You will notice some modifications to our program, including how information is displayed on your statements and how information is disclosed.
The largest change for us as a result of the legislation is moving from a fixed-rate to a variable-rate product. The rate will be tied to the Prime rate and will rise and fall as does the Prime rate, similar to most variable-rate home equity lines of credit. The good news is that this change allowed us to reduce or maintain rates for the majority of our members. A small group of our members’ rates will increase slightly due to credit qualifications; however, those members will have the opportunity to have their rate reviewed and lowered as their credit improves.
We’ve put a lot of time and effort into redesigning our credit card program to comply with the new regulations and in the best interests of our members. You can be confident that our rates and terms will continue to be among the most competitive in the marketplace.
I am happy to take questions in the comments section.