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PROPOSAL WOULD LIMIT INCREASES IN CREDIT CARD
FEES AND RATES
May 02, 2008 - In a far-reaching effort to rein in abusive credit card practices, federal regulators
have proposed restricting the ability of card issuers to sharply raise interest rates and fees.
The Federal Reserve on Friday approved the proposal, released Thursday by the Office of
Thrift Supervision and the National Credit Union Administration. The proposal would:
• Bar issuers from raising interest rates on existing debt, except under certain conditions, such
as when a promotional rate expires or when a borrower pays 30 days or more late.
• Prohibit issuers from calculating one month of finance charges based on two months' worth
of activity, a punitive practice called double-cycle billing.
• Require card issuers to apply monthly payments that exceed the required minimum at least
partly to higher-rate card debt. Borrowers often face varying interest rates on credit card debt,
for cash advances, balances transferred and purchases.
• Bar financial institutions from charging checking-account customers a fee for paying an
overdraft — unless the customer has had the chance to opt out of this payment.
Click on the red link above to continue the story.
Source: USA Today
FEES AND RATES
May 02, 2008 - In a far-reaching effort to rein in abusive credit card practices, federal regulators
have proposed restricting the ability of card issuers to sharply raise interest rates and fees.
The Federal Reserve on Friday approved the proposal, released Thursday by the Office of
Thrift Supervision and the National Credit Union Administration. The proposal would:
• Bar issuers from raising interest rates on existing debt, except under certain conditions, such
as when a promotional rate expires or when a borrower pays 30 days or more late.
• Prohibit issuers from calculating one month of finance charges based on two months' worth
of activity, a punitive practice called double-cycle billing.
• Require card issuers to apply monthly payments that exceed the required minimum at least
partly to higher-rate card debt. Borrowers often face varying interest rates on credit card debt,
for cash advances, balances transferred and purchases.
• Bar financial institutions from charging checking-account customers a fee for paying an
overdraft — unless the customer has had the chance to opt out of this payment.
Click on the red link above to continue the story.
Source: USA Today
