WASHINGTON-President Obama signed into law the Credit Card Bill of Rights just before the Memorial Day recess.
The bill, which began as a threat to credit unions, was eventually watered down enough that the credit union lobby lifted its opposition.
It will bar credit card issuers from retroactively raising rates until a cardholder is at least 60 days delinquent; ban double-cycle billing and universal default; and prohibit solicitation of cards to minors. It would also require lenders to apply payments to balances with the highest interest rates first.
The provisions are very similar to those passed by the Federal Reserve Board as amendments to its Regulation Z last December. The major difference is the Fed's rules do not go into effect until June 30, 2010, while these changes would go into effect nine months after the bill was signed into law. That means the changes would go into effect next February.
The credit union originally opposed the amendments, but they realized that few credit unions engage in these practices, so credit unions will be little affected.
