Alert July 28, 2009

FRB Issues Interim Final Rule Implementing Credit Card Act

The FRB issued an interim final rule which amends Regulation Z to implement certain provisions of the Credit Card Accountability Responsibility and Disclosure Act of 2009. Among other things, the rule requires creditors to: (1) provide written notice to consumers 45 days before the creditor increases an APR on a credit card account or makes a significant change to the terms of a credit card account; (2) inform consumers in the same notice of their right to cancel the credit card account before the increase or change goes into effect; and (3) mail or deliver periodic statements for credit cards and other open-end consumer credit accounts at least 21 days before payment is due. The interim final rule is the first stage in the FRB’s implementation of the Credit Card Act. In May 2009, the Credit Card Act amended the Truth in Lending Act and other statutes to address credit card practices. The Credit Card Act’s amendments to TILA go into effect in three stages. The interim final rule is effective on August 20, 2009 as it implements the provisions of the Credit Card Act that go into effect on August 20th. The remaining provisions of the Credit Card Act go into effect on February 22 or August 22, 2010 and will be implemented by the FRB at a later date. Comments on the interim final rule must be received by September 21, 2009. Click here for the interim final rule.