Federal Reserve Credit Card Regulations Set For Thursday Vote
Dec 16th, 2008 | By Rob | Category: Uncategorized
The credit card industry may face “a day of reckoning” on Thursday, according to one leading news agency.
The Federal Reserve is set to vote on the much anticipated new regulations for the the credit card industry on Thursday that resulted from the proposed regulations and public comment period that the Federal Reserve announced back in May. The proposal is over 1,000 pages.
These regulations would:
- improve disclosure by encouraging plain language rather than legalese in the terms and conditions .
- ban interest rate increases on existing balances without a late payment of 30 days or more.
- prohibit banks from applying payments entirely to the balance with the lowest interest rate on accounts with different rates for different balances.
- end universal default, which permits changes to your credit card terms on failure to meet the terms of other contracts.
The Washington Post has reported that one measure which is not expected in the final proposal is the measure prohibiting the charging of fees for overdraft protection without allowing consumers to opt out of overdraft protection.
Credit card lobbyists have warned that the proposal will increase the cost of credit for consumers and that credit card issuers will have to cut credit lines and increase interest rates on future purchases (rather than existing balances) because of the Federal Reserve proposal.
