Credit Card Reform and Bankruptcy Reform

Abstract

Consumer advocates won a victory with the passage of the Credit Card Accountability Responsibility and Disclosure Act of 2009. (Credit Card Act). The Credit Card Act bans certain pricing practices that were confusing to credit card users. Ironically, the seeds of this legislative victory may have been sown through an earlier legislative defeat - the Bankruptcy Abuse Prevention And Consumer Protection Act of 2005 (BAPCPA). In passing the Credit Card Act, the U.S. Congress Joint Economic Committee cited a study of the effects of BAPCPA on credit card industry profits and prices. The study revealed that the credit card industry may have misled Congress about the probable effects of BAPCPA. The complete and final version of this study was recently published in the American Bankruptcy Law Journal. What follows is a summary.

Keywords: credit card, bankruptcy, reform, regulation, consumer protection

JEL Classification: A1, B4, D1, D2, D4, D6, D8, D9, E4, E5, G21, G28, K00, K12, K2, L1, L2, L4, M2