The shareowner proposals, submitted by
members of the Interfaith Center on Corporate
Responsibility (ICCR), were described in a story posted by SocialFunds.com
last month. The proposals "request that Boards of Directors complete reports to shareowners that
evaluate practices commonly deemed to be predatory, the credit card marketing, lending, and
collection practices of the companies, and the impacts these practices have on borrowers."
The bill signed into law by the President includes four Principles for Long-term Credit Card
Reform. Consumers must have reliable protection from credit card abuses, and must be able to shop
for credit cards without being taken advantage of. Credit card companies must use plain language to
realize their responsibility for transparency in all communications with consumers, and their
accountability must be expanded to ensure that they can be held responsible for deceptive
The key elements of the CARD Act include the banning of unfair rate increases,
which include retroactive rate increases and unfair fee traps in such forms as weekend deadlines,
for example. Creditors must give consumers clear disclosures of account terms before the opening of
an account, and clear statements of account activity afterwards. Accountability will be increased
both for creditors, who must make contracts available on the Internet in a usable format, and for
regulators, who will be required to request public input on trends and potential consumer
protection issues. Regulators will be required to report annually to Congress as well.
act also contains new protections for college students and young adults.
Upon signing the
bill President Obama said, "With this new law, consumers will have the strong and reliable
protections they deserve."
Many of the predatory tactics addressed by shareowner
resolutions by ICCR members seem to have been targeted by the CARD Act. These include universal
default policies, bait-and-switch marketing tactics, hidden fees, and intentionally complicated
Whether the bill would mitigate the impact of creditor policies on
consumers by helping them manage and reduce their debt, and whether new standards of underwriting
would be required, are less clear.