The Truth in Lending Act Amendment 2009 – What Did We Really Do?

When I went to college, I signed my name on the dotted line for every credit card vendor booth I passed.  As long as they were giving something away for “free”, I was determined to get my share.  Little did I know the free thing given away would be years of bad debt and calls from bill collectors.  Fast forward 14 years and I sit a little smarter than I was in my youth.  I know the value of my credit, my name and I try not to borrow more trouble than I can manage.

So what has this new act that awaits Obama’s signature done for credit novices that was not being done before? 

• Advance Notice of Increase in Interest Rate Required – They are required to tell us 45 days before they hike up the rate!
• Advance Notice of Other Significant Changes – If they plan to change something and it will make us spaz out, they have to tell us 45 days in advance
• Right to Cancel – We have a right to “quit” them and now they have to tell us that, just in case we didn’t know before
• Rule of Construction – If we “quit” them, they can’t get mad and do something dirty like report us as a defaultor on our obligation or force us to pay in full ASAP.
• Annual Percentage Rate Increases – they can still have annual increases without giving 45 day advance notice  if they tell us:

1. a time period for our existing rate
2. the amount the rate will increase to once that time period ends
3. the new rate does not exceed what they told us

Furthermore, if they give us high rates to begin with because we are deemed “high risk”, the credit card company has to review our account every six months to see if any of those high risk factors have disappeard and as such consider lowering our rate.  The bill contains so many other items (too many to read in one sitting) but I encourage people to take the time to check out HR 627 to learn more.  It isn’t perfect and seems to implement many safe guards that we should as consumers be doing on our own, but it is a step in the right direction.