Fed Adopts New Credit Card Rules

The Federal Reserve adopted new rules Tuesday aimed at protecting credit card customers from getting socked by lofty late payment charges and other penalty fees.

The rules respond to public and congressional outrage over practices by credit card companies.

They bar credit card companies from charging a penalty fee of more than $25 for paying a bill late. They prohibit credit card companies from charging penalty fees that are higher than the dollar amount associated with the customer's violation. They also ban so-called "inactivity" fees when customers don't use the account to make new purchases and they prevent multiple penalty fees on a single late payment.

The rules take effect on Aug. 22.

"Consumers will finally be protected from the worst credit card issuer abuses," said Rep. Carolyn Maloney, D-N.Y., a major advocate for the changes.

In addition, the rules require companies to reconsider interest rates imposed on customers since the start of last year. Some lenders pushed through rate increases ahead of the first phase of sweeping new credit-card protections, which took effect earlier this year. Those first set of rules were designed to protect customers from sudden hikes in interest rates.

Congress directed the Fed to implement the new credit card protections in legislation signed into law by President Barack Obama last year.

"The new rules require that late payment and other penalty fees be assessed in a way that is fairer and generally less costly for consumers," said Fed Governor Elizabeth Duke, the central bank's point person on the rules. "Card issuers must also reevaluate recent interest rate increases, and, if appropriate, reduce the rate," she added.

Legislation in Congress revamping the nation's financial regulatory structure could reduce the Fed's influence over consumer protections. A Senate-passed bill would house a watchdog agency inside the Fed, but chairman Ben Bernanke would have no authority over it. A House-passed bill would set up a new agency devoted to consumer protection and would strip the Fed of some of its consumer oversight. Lawmakers are working to reconcile the bills into a final package.

[tsigili]

These minor adjustments to the rip-offs of the big banks, is pretty laughable.

[KeithDrippingSprings]

Our powerful Legislators basically ask the credit card companies to be nice. No power in the bill.

What I really wonder is how much crap was in the bill that had nothing to do with credit cards. The real theft is going on in Washington. There is no Credit card company that steals as much as our Legislators. Corruption and lack of Morals begins at the top, our Congressmen and Senators can show everyone how to be the best Scoundrels and Thieves money can buy.