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Credit Card Act Compliance Moved Up

WASHINGTON (CN) -The Federal Reserve Board of Governors moved up the date for credit card companies to comply with amendments to Regulation Z, which are similar to provisions later adopted in the Credit Card Accountability Responsibility and Disclosure Act of 2009.

The major provisions for which compliance is effective Feb. 22 instead of July 1, include the prohibition on credit card issuers applying increased annual percentage rates and certain fees and charges to existing credit card balances except under certain conditions, such as when a minimum payment is more than 60 days late.

Also effective Feb. 22, is that credit card issuers must evaluate a consumer's ability to pay when establishing a credit line. Such an evaluation must include a review of the consumer's income or assets, and current obligations, regarding which an issuer may rely on information provided by the consumer or from a consumer's credit report.

According to, as of April 2009 there are about 631 million credit cards in circulation in the U.S. carrying almost a trillion dollars of debt charged an average interest rate of 14.1 percent. The average outstanding household credit card debt is approximately $10,600. In the fourth quarter of 2008, the most recent date of data available, 13.9 percent of consumer disposable income is spent to service this debt.

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