PROPOSED CREDIT CARD CHANGES

The Federal Reserve, in conjunction with the U.S. Treasury's Office of Thrift Supervision and the National Credit Union Administration discussed today a proposal to crack down on "unfair and deceptive" credit card industry practices. While specific details have yet to be released, it appears [based on major media reports - New York Times, Washington Post, etc.] the changes would address many widespread card abuses. Some issues the proposed new rules would curb ...

- Directing payments to a lower rate when a card carries multiple rates.
- Placing unfair time constraints on payments (payment would not be deemed late unless the borrower is given a reasonable period of time to pay, such as 21 days).
- Retroactively raising the APR on pre-existing balances.
- Unfairly computing balances (i.e., double-cycle billing).
- Making deceptive offers of credit.
- Charging fees for phone payments.

Not surprisingly, the banking industry is less than thrilled and will fight the proposals ...