New credit card rules get OK - ban unfair late fees, interest hikes on certain balances

[The Straight Story]

New credit card rules get OK
Sweeping reforms ban unfair late fees, interest hikes on certain balances

WASHINGTON — The federal government Thursday approved new rules that would ban certain financial institutions from engaging in unfair credit card practices.

The steps taken by the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration represent the most significant reform of the credit card industry in decades.

The government Thursday banned banks, credit unions and savings associations from several practices.

Among the practices that would be prohibited are: Raising interest rates on existing balances unless a payment was received more than 30 days late; charging a late fee if a borrower was given less than 21 days to pay; and applying payments in a way that would result in debts with higher interest rates getting repaid last.

In the subprime credit card market, which caters to borrowers with poor or mediocre credit histories, fees that reduce the credit available to them would be restricted. Financial institutions would have to comply with the new regulations by July 1, 2010.

With the approval of new rules banning "unfair and deceptive" practices Thursday, the federal government is handing a victory to consumer groups who have long complained of lax oversight of the $970 billion industry.

http://www.chron.com/disp/story.mpl/nation/6172714.html

[dembotoz]

1. do we really need to applaud what should have been common sense?

long overdue
and still not enough

[Idealism]

2. This isn't going to be instituted till 2010...

What the hell are we going to do for the next year while our standard of living drops like a rock

[Mike 03]

8. That shocked the hell out of me. I'd been following this story for months,

and I thought it went into effect on Jan 1, 2009.

What is the point of even having these changes if they don't go into effect until June 2010.

[ananda]

3. How is this a victory for consumers if..

.. the rules don't apply until JULY 2010?

That's a year and a half from now.

[sandnsea]

4. When poor people complained

about all this unfairness, nobody listened because poor people should just get more responsible or get a better job. Now that upper income people are having problems - well now we've got unfair credit card practices.

I wonder how long before the collection industry comes under fire and is required to follow the laws again.

[Kelvin Mace]

5. Not enough

- Cap interest rate at 18%
- No junk fees (late, over limit, cash advance)
- Failure to credit payment when received will result in penalty equal payment credited to customer's account.
- No cryptic terms in tiny type.

[Phentex]

6. The last one is as serious as the rest...

No company should be allowed to send you information in the smallest type they can use containing the most vague language they can use and then make you opt out of whatever it is they are trying to pull over on you.

[Kelvin Mace]

7. The only way I will permit corporations to that

is if the customer gets the same right. :)

Oh, and I forgot one. Credit card companies may not share any information about you without your EXPLICIT AFFIRMATIVE permission for each instance of sharing. The only exceptions are:

1) Credit Reporting Agencies.
2) Law enforcement with valid warrants.