In order to protect consumers from unfair market practices, U.S. lawmakers have decided to move forward the date on which the credit card reforms will become effective.
Media reports in recent months have suggested credit card companies have been hiking interest rates and fees in anticipation of the reforms that were set to take effect in February and August 2010 and bar them from similar practices.
The 331-92 House vote on the Expedited CARD Reform for Consumers Act—sponsored by two Democratic Representatives Carolyn Maloney of New York and Barney Frank of Massachusetts—has moved the effective date to Dec. 1, 2009.
In response to the vote, Representative Maloney said the companies "brought this on themselves" and the ban will crack down on actions that "have kept far too many consumers trapped in a never-ending cycle of debt."
News reports states that among the provisions that will become effective earlier than planned are a prohibition on arbitrary interest rate increases and universal default on existing balances and a ban on interest charges on debt paid on time. Moreover, issuers will be required to set penalties in such as way as to be reasonable and proportional to the omission or violation.