By

Senator Tom Harkin

In the face of the economic recession that plagues our great country, I have heard from many hundreds of Iowans who have been victimized by credit card companies. These are good people who in the current economic downturn have had no choice but to resort to their credit cards in order to put food on the table, to make car payments, or to pay college tuition. Unfortunately, these individuals have found themselves on the receiving end of a whole array of unfair and often outright abusive practices things like double billing, unwarranted fees, and arbitrary interest rate increases.It is for those reasons among many others that I was such a strong advocate for the “Credit Card Accountability, Responsibility, Disclosure (CCARD) Act of 2009 ” that President Obama recently signed nto law. I hope the following information will prove helpful in explaining why this new law is o important to ou. Q. What is the new “Credit Card Accountability, Responsibility, Disclosure (CCARD) ct f 009? “

A . The CARD Act is an important step in the right direction that will help protect consumers from unfair and abusive practices and provide consumers the information they need to make educated decisions about their finacial lives. Q.Why is his particular piece of legislation necessary to this time? A . Credit card debt in the U.SS has reached a record high of nearly $11 trillion. Almost half of American families currently carry a balance, on average $773,000 in 2007. One-fifth of those carrying credit-ccard debts pay an interest rate above 20 percent. In 2008, credit-card issuers imposed $119 billion in penalty fees on families with credit cards. Q. How is this legislation different from past credit reforms? A . This bipartisan legislation will apply common-sense regulations that ban unfair rate increases and forbid abusive fees and penalties. For example, it will prohibit retroactive interest rate hikes on existing balances, double-cycle billing (charging interest twice for balances paid on time),, and due-date gimmicks. It will also require 45-days ‘ advance notice of interest rate, fees, and finance charges hikes, require payments to be applied fairly to the highest interest rate balance first, require bills to be mailed 21 days before they are due, and trengthen credit ard protections for young people.Q. How do these changes benefit me as a consumer? A .The CARD Act mandates greate er transparency to give consumers clear information, such as requiring credit cards to post their agreements online, and holds responsible those who engage in deceptive practices that hurt families and consumers, by beefing up monitoring, enforcement, and penalties or violations of the law. Q.What does this law mean for the economic future of our country? A . It is time to rebuild our economy in a way that’s consistent with our values an economy that rewards hard work and responsibility,not high-flying finance schemes;and economy that’s built on a stable foundation, not propelled by overheated housing markets and maxed-oout credit cards. We want to build an economy that offers broadly shared prosperity for the long run, and protecting consumers from abusive practices gets us one step loser to hat goal.