OTS Bans “Unfair” Credit-Card Practicesby Tim Manni
The Office of Thrift Supervision (OTS) approved a final rule today designed to help eliminate “unfair credit-card acts or practices.” If you consistently read this blog, you may recall several posts published many months ago regarding proposed credit-card regulations that stalled in the Senate and failed to progress further.
The approved rule enacts five significant changes to the way credit-card companies bill and charge cardholders (click here for a summary of each rule). “The rule will enhance public confidence in financial institutions and establish a level playing field for institutions that want to do business fairly without suffering competitive disadvantages,” said OTS Director John Reich.
Not everyone is praising the new ban on “unfair” practices:
The rules may increase costs for most card users and reduce credit availability, especially for consumers with lower credit scores or limited credit history, Edward Yingling, president of the American Bankers Association, a Washington-based industry group, said in a statement.
“With the uncertainty facing our financial system, it’s absolutely vital for policymakers to understand the full impact of these regulations on consumers and the economy before judging their success or further restricting the marketplace,” Yingling said.
The rules, which are set to take effect in July 2010, are, according to Bloomberg.com, expected to be approved by the Federal Reserve and the National Credit Union Administration later today.