New credit card rules mandated by the Credit CARD Act of 2009 have resulted in significantly greater price transparency for consumers, a new research report from the Center for Responsible Lending finds.
The report, "Credit Card Clarity: CARD Act Reform Works," also finds that the price consumers pay for credit cards has remained stable and access to credit has not tightened beyond what would be expected from the economic downturn. According to the organization, CARD Act reforms have helped reverse years of increasingly unclear pricing that misled consumers into believing they would pay less for credit card debt than was actually true, the report finds. Inaccurate pricing likely caused many borrowers to take on more credit card debt than they otherwise would have.
But The Wall Street Journalnotes during congressional debate on the credit-card bill, banking groups such as the American Bankers Association (ABA) argued that the proposal would result in a significant pull-back in credit while also increasing the cost of credit.
The ABA now says that while the CARD Act has helped lead to greater price transparency for consumers, the reality is less credit and higher prices for a number of Americans.