May 22 (Bloomberg) -- President Barack Obama signed into law a credit-card consumers’ “Bill of Rights” that limits fees and curbs contract changes, saying it will give Americans “the strong and reliable protections they deserve.”Obama Signs Credit-Card Consumers’ ‘Bill of Rights’ (Update2) - Bloomberg.com
“We’re putting in place some common sense reforms, designed to protect consumers,” Obama said at a White House Rose Garden ceremony. “We’re not going to give people a free pass, we expect consumers to live within their means and pay what they owe, but we also expect financial institutions to act with the same sense of responsibility.”
The legislation would make card companies apply payments to balances with the highest interest rates first. Increasing a consumer’s rate on existing balances based on late payments to another lender, a practice known as “universal default” would be prohibited.
The administration considers the legislation part of its efforts to restore the U.S. economy by creating a “fair, transparent and simple consumer credit market,” Treasury Secretary Timothy Geithner said May 19.