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Federal Agencies Aim to Tighten Card Regulations |
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Federal regulators have unveiled a proposed rule that would prohibit what officials consider "unfair" or "deceptive" credit and debit card practices. The agencies, the Office of Thrift Supervision and the National Credit Union Administration, backed by the Federal Reserve, expect to publish the proposed rule in the Federal Register next week.
Federal Reserve Chairman Ben S. Bernanke said the agency's effort to regulate the credit card industry by requiring better disclosure forms has fallen short and that certain practices have to be banned to protect consumers.
"Based on our review of consumers' response to the Board's recent regulatory initiative, it seems clear that improved disclosures alone cannot solve all of the problems consumers face in trying to manage their credit card accounts," he said.
If the proposed rules are instituted, they would constitute the most significant crackdown on the credit card industry in decades. The rules would, among other things, specify when card issuers can increase interest rates on existing balances, ban finance charges on balances that have been repaid, and prohibit late fees on customers who were not given a reasonable amount of time to pay.
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