Fed to Pursue Aggressive Checks on Credit Cards

Source: Washington Post

Fed to Pursue Aggressive Checks on Credit Cards

By Nancy Trejos
Washington Post Staff Writer
Friday, May 2, 2008; A01

The Federal Reserve and two other banking regulators are set to unveil today one of the most aggressive efforts in decades to crack down on the credit card industry, prohibiting practices such as arbitrarily raising interest rates on outstanding balances.

The proposed regulations, which could be finalized by year's end, would label as "unfair or deceptive" practices that consumers have long complained about. That includes charging interest on debt that has been repaid and assessing late fees when consumers are not given a reasonable amount of time to make a payment. When different interest rates apply to different balances on one card, companies would be prohibited from applying a payment first to the balance with the lowest rate.

"It's stronger than what has been issued in the past," said William Ruberry, a spokesman for the Office of Thrift Supervision, which has joined the Fed and the National Credit Union Administration in backing the proposals. "What they proposed is a significant set of rules governing credit card practices and overdraft protection."

In the past, the agencies have regulated the industry by forcing card issuers to better disclose terms and conditions to customers. Last summer, the Fed proposed requiring card companies to improve their disclosures, a plan still being considered. But this new proposal, a summary of which was released by the OTS and the NCUA yesterday, would send a clearer pro-consumer message, credit card watchdogs and government officials said.

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2008/05/01/AR2008050103218.html?nav=rss_email/components

Money in the mattresses, folks. Jewelry in the floorboards.

Starts taking on the financial services industry as a whole, especially insurance companies and debt collection concerns, then I will believe they are serious about positive change for the citizenry.

Until then, if you need me, I will be yawning.

...as regards what they're doing, what they're NOT doing, what could be done better, and who's profiting from this.

My first impression is that this is mostly a bone thrown to the public, covering the most obvious abuses, as a firebreak against more comprehensive reforms.

She was late ONE TIME on her Chase credit card. They raised her interest rate to 30%. She was giving them 5000$ a month but still couldn't pay it off. She had to declare bankruptcy. They should have never let them raise the rates in the 2005 banking bill, in the first place. They need to lower the cap to 15%. Thanx for nothing!