President Obama today signed into law a bill that prevents credit card companies from raising interest rates arbitrarily and limits the fees they can charge, meeting his own deadline of enacting the bill before Memorial Day.

"Just as we demand credit card users act responsibly, we demand that credit card companies act responsibly too," he said before signing the Credit Card Accountability, Responsibility and Disclosure Act.

Joining him in the Rose Garden for the signing were several members of Congress, including  Sen. Christopher J. Dodd (D-Conn.), who authored the bill, and  Sen. Richard Shelby (R-Al.), the top-ranking Republican whom Dodd struck a compromise with to ensure passage. In the audience were several consumer advocates.

The landmark legislation is likely to transform the industry, which has remained largely unregulated since the relaxing of usury laws in the late 1970s.

"With the signing of this bill, President Obama has ushered in a new era where consumer protections will be strong and reliable, rules transparent and fair, and statements clear and informative," Dodd said in a written statement.

The law prohibits card companies from raising interest rates on existing balances unless the borrower pays at least 60 days late. If the cardholder pays on time for the following six months, the company will have to restore the original rate. On cards with more than one interest rate, issuers will have to apply payments above the minimum first to the debts with the highest rates. Before increasing rates, the card company will have to give cardholders 45 days' notice.

Card executives have said the changes would prevent them from properly distinguishing between risky and non-risky borrowers and force them to charge everyone higher rates and annual fees or withhold credit. The bill will take effect nine months after it is signed. The new law provides much stronger protections than credit card regulations passed by the Federal Reserve in December. Those regulations are scheduled to go into effect in July 2010.

meanwhile ....

Frankie "The Gorilla" Pistone leans wistfully on his bat. Then, without warning, he picks it up, swinging it furiously toward his deadbeat client's leg. Just before the Louisville Slugger makes contact with the man's kneecap, he pulls back, as only a real pro can, leaving the $250-in-the-hole man gasping in fear and relief. "Just get it to me by tomorrow, because next time, I ain't gonna let up," Pistone says.

As the thankful man scurries off, Pistone pulls the cigarette out of his mouth and drops it to the ground. "I'm going to miss this," he says.

Frank Pistone is part of the dying breed known as the American Loan Shark. Not so long ago, the loan shark flourished, offering short-term, high-interest loans to desperate people with nowhere else to turn. Today, however, Pistone and countless others like him are being squeezed out by the major credit-card companies, which can offer money to the down-and-out at lower rates of interest and without the threat of bodily harm.

"It's a damn shame," said Joseph Stasi, 61, a South Philadelphia loan shark whose business is down 90 percent from its mid-'70s heyday. "These days, there's just no place for the small businessman. My kind, we just can't compete with the Visas and MasterCards of the world."

http://www.theonion.com/content/node/28387