A recent study from the Center for Responsible Lending found that consumers have not been harmed by increased regulation of the banking industry brought by the Credit CARD Act. In fact, many of the changes enacted by the law have worked as intended and made it easier for consumers to deal with their outstanding credit card debt.
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For example, the study found that only one statistic has changed considerably in the months since the final provisions of the Credit CARD Act has been passed. The advertised interest rates on direct mail credit card offers has increased, while the actual APRs consumers pay have remained unchanged. This added transparency is considered good for potential borrowers, who will likely save as much as $12.1 billion on previously hidden charges.
The study also mentioned it’s likely the increased disclosure will drive interest rates downward as lenders compete for more consumers’ business.
The Credit CARD Act may have also helped consumers get a better handle on their finances, as national rates of delinquency and default have repeatedly been reduced in recent months.
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