Washington, D.C. – Rep. Raúl M. Grijalva today highlighted two new consumer protection measures going into effect Aug. 22 from the Credit Cardholders’ Bill of Rights, which President Obama signed in May of 2009. One provision requires, for the first time, that penalty fees for late credit payments to be “reasonable and proportional.” The other requires credit card companies that raise interest rates to re-evaluate the increase every 6 months and, if appropriate, reduce the rate within 45 days of completing the evaluation.

Most of the bill’s provisions became effective in August 2009 and February 2010.

“The Credit Cardholders’ Bill of Rights will mean billions of dollars in savings for America’s consumers each year,” Grijalva said. “Families in District Seven will save hundreds or even thousands of dollars because Congress saw a problem in the credit industry and worked to solve it for the American people.”

A recent report from the Pew Charitable Trust called the Credit Cardholders’ Bill of Rights “a major milestone in the move to make credit cards safer, transparent and more fair for consumers.” A recent analysis by USA Today concluded that the new credit card protections, along with debit-card overdraft reforms recently instituted by the Federal Reserve, will save U.S. consumers at least $5 billion in fees this year alone.

Other key consumer protections in the Credit Cardholders’ Bill of Rights that went into effect in August 2009 and February 2010 include:

– Prohibiting retroactive interest rate hikes on existing balances.

– Banning double-cycle billing (charging interest twice on balances paid on time).

– Ensuring fairness of due dates, including requiring statements be mailed 21 days in advance of the payment date and requiring the payment date to remain the same each month.

– Requiring 45-days’ advance notice of interest rate, fee and finance charge hikes.

– Strengthening credit card protections for young people.

– Requiring that billing statements from credit card companies be clear, be in plain English, and show how long a balance will take to be fully paid off if only the minimum payment is made.