U.S. PIRG celebrates 10 years of the Credit CARD Act

Media Contacts
Mike Litt

Director, Consumer Campaign, U.S. PIRG Education Fund

Law eliminated unfair practices without destroying credit marketplace


U.S. PIRG celebrated the 10th anniversary of the passage of the groundbreaking Credit CARD (Credit Card Accountability Responsibility and Disclosure) Act today by joining with the law’s chief sponsor Rep. Carolyn Maloney (NY) at a U.S. Capitol press conference. The legislation has saved consumers more than $100 billion since being enacted in 2009.

“The law is a government success story that cleaned up a Wild West credit card marketplace by eliminating unfair tricks and traps without destroying the market,” said U.S. PIRG Consumer Campaign Director Mike Litt, who stood with Rep. Maloney and others at the Capitol, to discuss the importance of the legislation. “Despite ‘sky is falling’ claims of impending doom from industry apologists at the time, the credit card industry is still strong and consumers can choose from a variety of cards.”

Before the Credit CARD Act passed in 2009, consumers experienced an increasingly unfair environment. For instance, in addition to raising late payment penalty fees, the banks added an interest rate penalty. As a result, late payers also faced a new doubled, or even tripled, interest rate, assessed on their entire unpaid balance. This could be up to three times the typical credit rate at the time of 12 percent annual percentage rate (APR). Another tactic, called “universal default,” allowed them to impose penalties on customers who consistently paid their bills on time but had their credit score decline for reasons unrelated to their account — like a late payment to another firm or utility.

“I was there when the banks invented all these unfair practices and when the banks claimed the Credit CARD Act would destroy the marketplace in their failed efforts to kill the bill,” said Ed Mierzwinski, U.S. PIRG’s senior director, Federal Consumer Program. “And I was there in the Rose Garden 10 years ago when President Obama signed the CARD Act, which was and is a tremendous victory for consumer protection over unfair financial marketplace practices.”

Since going into law, the act has prevented banks from raising interest rates on existing balances unless a consumer is more than 60 days overdue. Limits on late payments and over-the-limit penalties were also enacted. The Credit CARD Act restricted “free” offers to college students as well, requiring students and young people to demonstrate an ability to repay or have a cosigner to obtain a card. A database describing contracts between colleges and credit card companies was also established.


U.S. PIRG, the federation of state Public Interest Research Groups, is a consumer group that stands up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society.