Comment on Credit Card Regulationsby Tim Manni
The Fed is inviting the public to comment on their latest proposal of rules aimed at cleaning up the credit card industry. Already more than 9,300 opinions have been expressed, and with an August 4 deadline, time is running out to let your voice be heard.
HSH published a news story back on April 25, dubbed “The Credit Cardholders’ Bill of Rights,” which detailed a proposal by Rep. Carolyn Maloney, D-NY. Along with proposals from other various lawmakers, these amendments will help shape the Fed’s new regulations;
“The ‘Bill of Rights’ aims to corral such practices as unannounced rate increases, unannounced changes in due dates, universal default – in which a non-payment to another creditor increases the card’s interest rate – and two-cycle billing, in which interest is charged to the previous month’s balance even if the bill has been paid off.”
The Fed released a statement back in May which detailed the five main regulations of the proposal. Banks will be prohibited from increasing rates on pre-existing credit card balances, applying payments aimed at increasing interest charges, and imposing two-cycle billing. Banks will be required to provide reasonable time for consumers to make payments – Senator Chris Dodd, D-Conn., proposed that banks mail credit-card bills 21 instead of 14 days before the bill is due – and banks must allow customers full benefits to discounted promotional rates. While consumers are praising the initiative, banks are criticizing the regulations, fearing consumers will face higher prices, fewer choices, and less competition that won’t allow credit-card companies to offer better deals.
“The proposed rules are intended to establish a new baseline for fairness in how credit card plans operate,” said Federal Reserve Chairman Ben S. Bernanke.
To comment on the latest regulations click here. All comments are available to the public, along with names and addresses.