New credit card laws 2010 in effect today

Elizabeth Fairchild — Mon, 22 Feb 2010 20:13:38 +0000

New credit card laws negatively affect banks

Legislation passed last year on new credit card laws goes into effect today, and banks are none too happy about it. “JPMorgan Chase, the nation’s largest credit card issuer, warned it expected its credit card business to lose as much as $750 million this year as a result of the new legislation,” says CNN.

That’s quite the hit, but credit card users will benefit — if they remain credit card users. Reuters reports that the new credit card laws will squeeze credit, meaning less of it will be available. Pretty soon, even more people will be turning to no fax payday loans when they need credit instead of traditional banks.

Better billing

For those who are still fortunate enough to have functioning credit cards, the new credit card laws of 2010 mandate less confusing billing practices, says Christian Science Monitor. Bills must be due on the same day each month, and card users must be informed of the amount due 21 days before the due date.

“Nearly all interest-rate increases on outstanding balances will be prohibited,” says CSM. Also prohibited are rate increases during the first year of service. Card issuers must inform customers 45 days before a rate increase.

Special care for 18-21

The new credit card laws state that people between 18 and 21 years old must either prove they have the means to pay credit card bills or have a cosigner before they can be issued a card. The laws also limit marketing to college students.

Rather than automatically having overdraft fees set in place that will be assessed any time a borrower goes over the limit, people must choose to be included in the overdraft program. If a card user who has not chosen to opt-in to the overdraft program makes a charge that goes over the limit the card will simply be declined.

South Carolina Senate Backs Off on Payday Loan Restrictions

Elizabeth Fairchild — Wed, 25 Mar 2009 19:24:02 +0000

Payday loan restrictions too much

South Carolina Capitol Building

Legislators have been laying the smack down on the payday loan industry in South Carolina lately. However, today it appears they might be willing to ease up a bit.

The regulations moving through the Senate included a provision that limits the total amount of a payday loan to 25 percent of the person’s income. A Senate committee today voted to take that provision out.

Most limits intact

The regulations before the Senate still contain most of the original limits they set out to place. Payday loans cannot be given in amounts higher than $500. It also adds a two-day cooling off period, during which a borrower cannot take out another payday loan after paying one off.

No limit to limits?

Some members of the South Carolina Senate say that the payday loan regulations simply don’t go far enough.

“This still needs more work,” said Sue Berkowitz, director of the Appleseed Center for Legal Justice in Columbia.

AARP lobbyist Teresa Arnold agreed that the restrictions at this point are not satisfactory. She said the $500 loan limit is still too high, and accused the Senate of moving backward.

A voice for the payday loan business

Jaime Fulmer, spokesman for payday lender Advance America Cash Advance, spoke out in defense of the payday lending industry.

“It still places a whole host of arbitrary limits on the industry,” he said.

Fewer jobs, fewer options

Already, in other states that have adopted regulations similar to the ones South Carolina is seeking, payday lenders have been run out. Advance America this year had to close down all 24 of its stores in New Hampshire. In a country with an already high unemployment rate, that put 50 more people out of a job.

Some advocates argued in South Carolina argued against the 25 percent of income limit in defense of low-income people. They said the rule would reduce options for poor individuals and families — the people that need help most.

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