New Credit Card Legislation

June 2, 2009

There have been mixed reaction from consumers and consumer groups on the new credit card legislation. The new law gives consumers some relief from excessive fees and requires the banks to notify them of rising interest rates, however, small business owners will not have the benefit of these new rulings. The law was enacted primarily to protect teens and college students from the excessive fees and interest rate increases.

An article posted by the Editorial Plain Dealer has noted that the new legislation completely overlooks small business owners because they will not have relief from the excessive fees or interest rate hikes.

More interestingly, some student groups such as the Jerry Stigler of the Michigan University Alumni Association feel that the credit card legislation as hindering the students from gaining financial independence because it requires students under the age of 21 to have a parent co-sign the application for a new credit card.

Additionally, some students have taken issue with the fact that the universities and colleges freely provide information to the banks about the students in return for a portion of the proceeds on new credit cards. The proceeds pay for scholarships, among other expenses incurred by the colleges and universities.

We will probably hear more about his as the law takes effect.