New Credit CARD Act Phase III Rules


Presented by: Mary Beth Guard and Jack Holzknecht

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On June 15, 2010, the Federal Reserve Board approved rules implementing the third and final phase of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act). The Credit CARD Act primarily amends the Truth in Lending Act (TILA) and establishes a number of new substantive and disclosure requirements to establish fair and transparent practices pertaining to open-end consumer credit plans. This final phase of the Credit CARD Act protects credit card users from unreasonable late payment and other penalty fees and requires credit card issuers to reconsider interest rate increases imposed since the beginning of 2009. It also makes a few revisions to existing rules for account opening disclosures, periodic statements and notices of change in terms.

The 252 pages of new provisions are effective on August 22, 2010. Mandatory compliance with some of the changes is required by December 1, 2010.

Upon completion of this program participants will understand the provisions that:
  • Prohibit credit card issuers from charging a penalty fee of more than $25 for paying late or otherwise violating the account's terms unless the consumer has engaged in repeated violations or the issuer can show that a higher fee represents a reasonable proportion of the costs its incurs as a result of violations;
  • Prohibit credit card issuers from charging penalty fees that exceed the dollar amount associated with the consumer's violation. For example, card issuers will no longer be permitted to charge a $39 fee when a consumer is late making a $20 minimum payment. Instead, the fee cannot exceed $20;
  • Ban "inactivity" fees, such as fees based on the consumer's failure to use the account to make new purchases;
  • Prevent issuers from charging multiple penalty fees based on a single late payment or other violation of the account terms;
  • Require issuers that have increased rates since January 1, 2009 to evaluate whether the reasons for the increase have changed and, if appropriate, to reduce the rate; and
  • Revise the rules for account opening disclosures, periodic statements and notices of change in terms.
This program contains core knowledge all banks need to comply with the new requirements that apply to open-end credit accounts by the August 22, 2010 effective date.

This program is designed for operations officers, compliance officers, loan officers, auditors and others who must comply with the new rules for open-end credit accounts.

About the Speakers: Jack Holzknecht is a principal with Pegasus Educational Services, LLC, a training firm headquartered in Louisville, Kentucky. He is an experienced consultant who has provided training to thousands of bankers and examiners for twenty-four years. He has the ability to identify the key compliance issues from each regulation. Jack's career began in 1976 as a federal bank examiner. He later headed the form and software and education divisions of a regional consulting company. In that capacity he developed loan and deposit form systems and software. He also developed and presented training programs to bankers in 43 states. Jack has been an instructor at compliance schools presented by the Georgia, Iowa, Kentucky, Pennsylvania, Nebraska, New York and Texas bankers associations. He developed and delivered compliance training for the FDIC and OTS for ten years. He is a Certified Regulatory Compliance Manager and a member of the National Speakers Association. He is also a "BOL Guru" at and frequently answers compliance questions sent to "Bankers' Threads."

Mary Beth Guard currently serves as Executive Editor of and CEO of Glia Group, Inc., Mary Beth has had a long and distinguished career, graduating from law school in 1980. She has focused her work exclusively on the banking industry since 1984. Previously, Mary Beth served as EVP/General Counsel and COO for the Oklahoma Bankers Association, EVP of Specialized Services for Thomson Financial Publishing, and General Counsel for the Oklahoma State Banking Department. Mary Beth is on the advisory board for Bankers' Hotline and Compliance Action, as well as on the editorial board for ABA Bank Compliance magazine. She has presented training programs for virtually every major national financial industry association, as well as more than a dozen state bankers associations and a host of other organizations. In addition, Mary Beth has written more than a thousand banking-related articles and is a BOL Guru.

This program was recorded in its entirety in July 2010. The CD-ROM includes program slides, materials (if available) and follow-up Q & A document.

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  • Model: cd_card0710
  • Manufactured by: Glia Group, Inc.

This product was added to our catalog on Wednesday 16 June, 2010.

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