In 2009, President
Among other provisions, the Credit CARD Act laid out significant consumer protections that stopped arbitrary interest rate increases, gave consumers new transparency to better manage their accounts, removed credit cards from college campuses, and provided consistency to store gift cards. Altogether, the reforms implemented under the Credit CARD Act have saved consumers an estimated
"The Credit CARD Act put an end to many of the worst credit card industry practices," said
However, despite these advances, regulatory gaps remain. Provisions in the act did not anticipate the significant growth in prepaid cards over the past five years. Furthermore, college campuses have seen high-cost debit cards that erode the value of students' money take the place of credit cards as a predatory financial instrument. Additionally, the act's transparency provisions are often out of reach for consumers who use online and mobile tools, and consumers are not always able to view credit scores for free. Finally, for some consumers, their credit records can prevent them from getting a job.
In order to address these issues, the
* Mandate greater prepaid transparency and regulation. Prepaid credit cards--which have grown significantly in recent years--are not subject to the same extensive consumer protections as credit cards and gift cards under the Credit CARD Act. To close this regulatory gap, prepaid cards should have standardized disclosures and comparable consumer protections to bank accounts.
* Crack down on college debit cards. Removing excessive credit card marketing from college campuses has helped reduce college students' financial vulnerability, but college debit cards are a new concern. Both the
* Offer printed statement tools online. As part of its growing focus on product disclosures, the
* Provide free access to credit scores. Credit score reporting should be mandatory for credit cards to provide all consumers with additional information to examine credit offers and make informed decisions.
* Limit the credit employment connection. Ten states currently limit the use of credit checks for employment purposes except for certain categories of jobs where credit reports are directly relevant.
Read the report: Protecting Consumers Five Years After Credit Card Reform (http://www.americanprogress.org/issues/economy/report/2014/05/22/90198/protecting-consumers-five-years-after-credit-card-reform/) by
* Financial Access in a
* The End of Cash: The Rise of Prepaid Cards, Their Potential, and Their Pitfalls (http://www.americanprogress.org/issues/economy/report/2013/04/04/59277/the-end-of-cash-the-rise-of-prepaid-cards-their-potential-and-their-pitfalls/) by
* It's Time to Regulate Prepaid Cards as Bank Accounts (http://www.americanprogress.org/issues/ext/2012/11/29/46367/its-time-to-regulate-prepaid-cards-as-bank-accounts/) by
For more information or to speak with an expert on this topic, contact
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