A year after federal legislation aimed at curbing unfair credit card billing practices went into effect, consumers are seeing fewer interest rate hikes and paying less in late fees, reports the Associated Press based on findings from the new Consumer Financial Protection Bureau.
Surveys conducted by the CFPB looked at the effects of the Credit Card Accountability, Responsibility and Disclosure Act on its one-year anniversary. President Obama signed the legislation, which received bipartisan support in both houses of Congress, in May of 2009. Here are some details from the surveys:
"Penalty charges overall are down. In January of last year — just before the regulations took effect — cardholders paid $901 million in late fees. That amount was more than halved to $427 million by November, according to the agency. Also, the number of accounts assessed late fees fell by nearly 30 percent.
"... Consumers also benefited from new rules on interest rates. Issuers can no longer hike rates on existing balances or in the first year after an account is opened. Cardholders must also be given 45 days' notice before the rate is hiked on new purchases.
"Before the regulations, about 15 percent of accounts saw rate hikes over the course of a year. That figure fell to just 2 percent in the year after the new rules took effect, according to data supplied to the CFPB by the Office of the Comptroller of the Currency."
The AP notes, however, that the surveys from the CFPB did not examine the full range of costs credit card customers face and that other charges -- such as annual fees -- were more likely to be higher.