As expected, the Federal Reserve Board approved a round of new regulations aimed a reigning in some credit card issuer practices deemed excessive by consumer groups and legislators. Thenew rules were approved December 18, but will not go into effect until July 2010, giving issuers 18 months to modify their internal systems to comply.

Among other things, the Fed's new riules require that issuers improve disclosures,  give consumers additional protection against "unfair or deceptive lending practices," ban most interest rate hikes for pre-existing balances, and ease payoff terms for cardholders.

A major concern for card issuers is that the change in rules on unfair or deceptive practices may retroactively expose banks to lawsuits under state laws that penalize those practices.

Consumer groups had asked the Fed to put the new regulation into effect as soon as possible after its adoption, while issuing banks sought a longer lead time to comply with the new requirements, noting that the time is needed to update their internal systems. The July 2010 deadline was seen as a victory for issuers.

Adoption of Reg Z will have little direct effect in acquiring banks or the payment industry, except to the extent the additional protections encourage increases in consumer card usage.