Lauzon: Conservative Government Announces New Regulations to Protect Credit Card Holders

May 21, 2009

OTTAWA - Earlier today, the Minister of Finance announced new regulations to protect Canadians who use credit cards. Specifically, the measures will regulate the business practices of financial institutions.

The new regulations include:

• A minimum 21-day, interest-free grace period on all new credit card purchases when a customer pays the outstanding balance in full
• Allocation of payments in favour of the consumer
• Express consent required for credit limit increases
• Limits on debt collection practices
• Restrictions on fees due to merchant holds

The new rules will also expand existing rules on disclosure by requiring credit card companies to include (on all new credit applications) the implications of paying only the minimum balance and a box with important credit contracts. Credit card companies will also be required to provide timelier disclosure of interest rate changes. 

“Our government is protecting consumers who use credit cards,” said local Member of Parliament Guy Lauzon. “We are making sure consumers get clear and useful information, not jargon and fine print, so they can make informed financial decisions. Our new regulations will require clear and simple information on credit card application forms and contracts, and clear and timely advance notice of changes to rates and fees.”

“With better information, Canadian consumers will be better able to make informed decisions,” added Lauzon.