President Barack Obama's top credit card expert will answer consumers' questions about the new credit card reform law during a live online town hall meeting scheduled for the day major provisions of the law are set to take effect.
Austan Goolsbee, an economist who serves on the president's Council of Economic Advisers, will address the public's questions about the new Credit CARD Act during a live video chat broadcast from the White House beginning at 2 p.m. EST Feb. 22.
The town hall webcast will be hosted by CreditCards.com on the Web page CreditCards.com/askthewhitehouse.
Many unaware of the law
Although the new law will dramatically change how cards are billed and promoted, many people are unaware it exists or that consumers will gain new protections against what regulators call "unfair or deceptive" card industry practices. A poll conducted by the Consumer Federation of America and the Credit Union National Association found that a vast number of Americans do not have a clear understanding of what the new law will and won't address. Until the White House town hall, no government agency has conducted significant public education about the law.
The Federal Reserve Board, which is the lead regulator setting guidelines for how the CARD Act is to be implemented by banks, published an informational Web site about the credit law on Jan. 12.
The new law, signed by President Obama on May 22, 2009, represents the most sweeping credit card reforms in history. Banks and credit card issuers will be banned from making "any time, any reason" interest rate hikes on existing credit card balances. Interest rates on those accounts can increase for only a limited number of reasons -- chiefly, if the account has a variable rate, if the cardholder is more than 60 days late paying the monthly bill or if a teaser rate ends.
The new law also severely curtails young adults' ability to open new credit card accounts in their own names. Adults younger than 21 must show proof they can repay their credit card debts or get a parent or someone over 21 to co-sign on the account. Marketing credit cards on or near college campuses will also be limited, and credit card companies must disclose any deals they have with colleges and universities to gain access to student mailing lists and telephone numbers.
Banks have said the new restrictions will force lending institutions to revamp their credit card business models. In the months leading up to the start of the law, banks have closed inactive credit card accounts, slashed credit limits on some accounts and hiked interest rates on millions of accounts in anticipation of the new law's restrictions.
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