Is there a U.S. federal or Washington state law that says that a
credit card issuer cannot close an account as long as the consumer is
making the payments on time?
Please provide the text of such a law, or relevant information showing
that no such law exists.
I think I read that such a law was passed as part of a bill last year.
I would like to track down the details.

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Request for Question Clarification by sublime1-ga on 10 Apr 2006 23:30 PDT

greenorion...

Searches aren't showing any results which indicate that a card issuer
can close an account without justification. The results instead suggest
that, even with justification, an issuer "may" cancel the card, but 
not necessarily.

Justification includes:

From the Financial Consumer Agency of Canada:

"It's important to pay your credit card bill on time. If you don't,
 you'll face extra interest charges and possible penalties such as
 an increase in your interest rate. Your credit card issuer might
 even cancel your card."
http://www.fcac-acfc.gc.ca/eng/publications/CreditCardsYou/managingyourmoney/managingmoney-3_e.asp

From the FDIC website:

"'Your bank may have the right to close your charge account if
 you exceed your credit limit or fail to pay certain fees, such
 as late-payment penalties,' says Ann Johnson, an FDIC consumer
 law attorney in Washington. 'The bank also may cancel your credit
 card account if the checks you send in for payment are returned
 because of insufficient funds.'"
http://www.fdic.gov/consumers/consumer/news/cnfall00/diduknw.html


The law you heard about may be the FACT Act, HR 2622, an amendment
to the Fair Credit Reporting Act (FCRA). The new law is called the
Fair and Accurate Credit Transactions Act of 2003 (the FACT Act).

A good discussion of the FACT Act is this article called, 'FACT Act
Is a Reality' by Jack Holzknecht, on the BankersOnline website:
http://www.bankersonline.com/idtheft/jh_fcra.html

A PDF of HR 2622 is linked in the first line of the article.

Since the FACT Act provides considerable greater oversight and
protection with regard to identity theft, it would be within
the scope of this Act for banks to be more cognizant of account
activity on your behalf, and possibly to put a hold on or cancel
an account which has been compromised, but this would be for your
protection, and not an arbitrary act or a penalty.

Let me know your thoughts...

sublime1-ga

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Clarification of Question by greenorion-ga on 13 Apr 2006 14:54 PDT

hi sublime,
what i vaguely remember reading is that there was some language
attached to the "Bankruptcy Abuse Prevention and Consumer Protection
Act of 2005 (BAPCPA)", some other clause which did not have to do with
bankruptcy, which provided additional protection to the consumer in
that if the consumer is making payments on time, the credit card
company is not allowed to close that account. also i heard they added
some clause that allows the credit card company to increase the
minimum payments to 4% of the balance instead of 2%. these are two
items i read in passing somewhere along the way in 2005. i have been
unable to track down the full text of the BAPCPA for some reason. If
you can find the text of the BAPCPA and cull out any sections that are
unrelated to bankruptcy and somehow related to the above items, then i
would consider this question answered. does $20 sound like a fair
amount for such work?
thanks,
greenorion

greenorion...

Unfortunately, this PDF document, which summarizes BAPCPA 2005,
notes that the full text of the Act is 400 pages, and is only
available by purchase, for the cost of $57:
http://www.cch.com/bankruptcy/Bankruptcy_04-21.pdf

Furthermore, a search of that document, the US Dept of Justice
website (which has the official home page for BAPCA), and a
blog devoted to the discussion of BAPCA, all return no results
for keywords relevant to your query, such as "close * account"
"minimum payment".

The BAPCA home page:
http://www.usdoj.gov/ust/eo/bapcpa/index.htm

The BAPCA blog:
http://bapcpa.blogspot.com/


So I'm afraid I can't accomplish a search of the actual full text,
as would be preferable, but a search for the following turned up
some relevant material:

"close * account" "Bankruptcy Abuse Prevention and Consumer Protection
Act of 2005" OR BAPCPA
://www.google.com/search?q=%22close+*+account%22+%22Bankruptcy+Abuse+Prevention+and+Consumer+Protection+Act+of+2005%22+OR+BAPCPA

One such result, from a PDF file titled, 'Bankruptcy Abuse Prevention
and Consumer Protection Act of 2005 - Amendments to the Truth In
Lending Act:
A Summary', by Joseph D. Looney, Hudson Cook, LLP, on the Counselor.com
website, notes the following with regard to creditors:

"Limitation on Your Right to Terminate an Account"

"You may not close an open end account simply because the account no
 longer accrues finance charges."
http://www.counselorlibrary.com/articles/pdf/article41.pdf


As for minimum payment and 2% and 4% interest, the same document
notes the following requirements for creditors:

"Minimum payment disclosures.

 You must add a disclosure to the front of the periodic billing
 statement that explains the impact of making only the minimum
 monthly payment. (These requirements do not apply to any charge
 card account, the primary purpose of which is to require payment
 of charges in full each month.)

 If you maintain a toll-free telephone number for the purpose of
 providing customers with the actual number of months that it will
 take to repay the customer's outstanding balance, you must include
 the following information on the front page of the billing statement:

 Making only the minimum payment will increase the interest you pay
 and the time it takes to repay your balance. For more information,
 call this toll-free number: XXXX.

 If you do not maintain a toll free number for this purpose, then
 the content of the notice will differ based on the identity of
 your regulator for TILA purposes. If the FTC is your TILA regulator,
 you must provide the following statement, in a prominent location
 on the front of the billing statement:
 
 Minimum Payment Warning: Making only the required minimum payment
 will increase the interest you pay and the time it takes to repay
 your balance. For example, making only the typical 5% minimum 
 monthly payment on a balance of $300 at an interest rate of 17%
 would take 24 months to repay the balance in full. For an estimate
 of the time it would take to repay your balance, making only minimum
 monthly payments, call the Federal Trade Commission at this toll-free
 number: XXXXXX.

 If the FTC is not your TILA regulator, you must provide one of the
 following disclosures on the front page of the billing statement:

 (i) If the minimum monthly payment on the plan is not more than 4%
 of the balance on which finance charges are accruing:
 
 Minimum Payment Warning: Making only the minimum payment will
 increase the interest you pay and the time it takes to repay your
 balance. For example, making only the typical 2% minimum monthly
 payment on a balance of $1,000 at an interest rate of 17% would
 take 88 months to repay the balance in full. For an estimate of
 the time it would take to repay your balance, making only minimum
 payments, call this toll-free number: XXXXXX.

 (ii) If the minimum monthly payment on the plan is more than 4%
 of the balance on which finance charges are accruing:

 Minimum Payment Warning: Making only the required minimum payment
 will increase the interest you pay and the time it takes to repay
 your balance. Making a typical 5% minimum monthly payment on a 
 balance of $300 at an interest rate of 17% would take 24 months to
 repay the balance in full. For an estimate of the time it would
 take to repay your balance, making only minimum monthly payments,
 call this toll-free number: XXXXXX."
http://www.counselorlibrary.com/articles/pdf/article41.pdf


Since this seems like the authentic language of the original Act,
and since the language and content seem to dovetail with the terms
in which you expressed interest, I'm going to go ahead and post this
as an answer.

If this satisfies your interests as I believe it will, you can add
a tip to the question prior to rating it. As for the appropriate
amount, it may help you to consider that researchers receive 75%
of the question price and 100% of the tip.

sublime1-ga

Thanks for the research, it is helpful.