This month I opened my bank statement to find that my bank, Bank of America, had included a little note that outlined one of their new policies. It informed me that they would no longer be charging unlimited overdraft fees and would set a limit of four $35 charges per day. While this may seem like a standard practice in ethical banking, it is actually one of the first signs that the government’s massive credit overhaul is beginning to come into effect.

Early in 2009 President Obama signed the Credit Card Accountability Responsibility and Disclosure Act of 2009, better known as the Credit CARD Act. This piece of legislation will essentially create a Bill of Rights for credit cardholders, which will protect them from predatory practices of credit lenders. Credit companies were supposed to use the months between the signing of the bill and it being enacted into law as an opportunity to begin to reform their practices, but this has been far from reality.

For the last several months credit card companies have been rampantly raising interest rates and shortening lines of credit on even the most prudent borrowers in an attempt to advantageously position themselves before the CARD Act takes effect. Since the bill will not affect existing contracts, companies are racing to impose excessive rates and penalties to existing lines of credit before the February 22, 2010 deadline. Currently none of the twelve major credit lenders are operating under the specifications of the new bill.

Rates have skyrocketed to as high as 29.9 percent for many card holders in recent months, even for those without a single late payment or delinquency on their account. Many borrowers are also reporting that their spending limit has been lowered despite paying off their balances in a timely fashion. According to the Federal Reserve, 54% of lenders have or plan to raise rates on their prime customers, and 74% will or have already raised rates on subprime borrowers. Traditionally, only about 20% of cards have had an annual fee, but that number is expected to rise drastically in the midst of the new regulations.

“Rather than react responsibly, the industry has flouted the will of Congress and the Administration by moving quickly to raise rates, increase fees, and reduce available credit before the law takes effect next year,” said Bob Johnson, the president of Consumers for Competitive Choice. “These are the types of tactics that the credit card industry is infamously known for—and they have to stop.”

Although the CARD Act is not scheduled to come into effect until February of next year, Congress is pressing to have the new laws enacted immediately in an effort to curb the current rate raising trend. Under the new laws, credit card companies will no longer be allowed to arbitrarily hike up interest rates, and requires companies to give 45 days notice of any increase.

The Fed has recently made further revisions to lending practices, imposing restrictions on various fees and charges. Beginning on July 1, the Fed will ban overdraft fees on all ATM and debit card transactions unless the consumer has overdraft protection, citing the fact these options as mainly used for discretionary purchases. There will also be new laws to protect consumers from excessive gift card fees, such as inactivity fees, which are often not fully disclosed.

A main provision of the bill is that unfair fee traps will be banned, and cardholders who pay on time will not be penalized. Under the new laws, lenders are required to allow at least 21 days for borrowers to make a payment from the time that a bill is sent. It will also prohibit classic tricks, such as weekend deadlines and unannounced over-limit fees.

As a recent college graduate, I’ve become accustomed to being bombarded with credit card applications on a regular basis. Many campuses even allow credit card companies to advertise on campus, something that will be changing under the new legislation. The bill outlines new regulations that will make it exceedingly difficult for creditors to target people under 21. Educational institutions and card issuers will be required to disclose their agreements that entail marketing and distribution practices on campus.

One benefit, although it may no seem that way for many borrowers, is that lenders are increasing their standards for issuing prime credit cards. While this will make it difficult for many to get lines of credit, it will prevent delinquent accounts and overspending that has become the norm in American society. Perhaps this will help spur a new trend of saving and fiscal responsibility throughout America that was the cornerstone of our rise to economic glory, but I’m not holding my breath.

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