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Who's Complying With New Credit Card Rules Now? Check BillShrink

By Peter Galuszka

Updated on: December 27, 2008 / 10:01 AM EST / MoneyWatch

Starting July 1, 2010, banks and other issuers of credit cards will have their wings clipped a bit by new Federal Reserve rules designed to protect consumers from predatory practices, such as not giving customers bills in a timely way so late fees can be added on.

But who will monitor who is tracking all of this? One group is BillShrink, a firm based in Redwood City, Calf. that tracks compliance with credit card rules. For more information I spoke with Samir Kothari, co-founder and vice president of products.
He told me that his firms rates credit card issuers on whether they are following the new guidelines right now, even before they have to. His results:

The first tier of firms that complies with most of the five points raised by the new rules. These include Capital One Financial, American Express and Discover. Second tier firms complying with at least one of the rules includes Citi, Chase, U.S. Bank and Bank of America. Third-tier firms relating mostly to subprime customers that don't generally comply include Orchard Bank and First Premier, among others,

The rules include:

No more universal default. Issuers can no longer increase interest rates because of matters that have nothing to do with that specific card, such as a late payment elsewhere. Those in compliance now include American Express, Cap One, Chase, Citi, Discover and Wells Fargo.
Statements must be mailed 25 days before the due date. Complying are Cap One, Discover, First Premier, Pulaski Bank and Wells Fargo.
No more arbitrary interest rate increases. No firm complies yet.
Cardholders must get 45 days notice before interest rates go up. Citi, Dicover and WellsFargo comply.
Card issuers must allocate payments with different interest rates more equitably. No one complies.
Cardholders can have the option to have a fixed credit limit. American Express, Cap One, Chase and Citi comply.
No more double cycle billing -- a policy that hurts consumers who pay off their balances in full in one cycle but not in the next. In compliance: Bank of America, Cap One, Chase, Citi, First National Bank of Omaha, First Premier Bank, Pulaski Bank, U.S. Bank, and Wells Fargo.
No more due date gimmicks. Payments can be made up to 5 p.m. Eastern Time on the due date. Complying are Bank of America, CapOne, Citi, Discover, HSBC, Orchard Bank, U.S. Bank and Wells Fargo.

Korthari says his firm has not rated some of the bank cards issued by stores. Even so, his two-year-old firm wants to serve as a benchmark and watchdog for consumers who use cards. Kothari says that he agrees with consumer groups complaints that waiting until mid-2010 to have the rules take effect seems a bit late. He also agrees with industry claims that complying with the new rules could make cards more expensive. But he dismisses some industry lobbyist statements that the rules will cost $12 billion as "a little propaganda."

"We hope they find a happy middle ground that is beneficial all around," he says.