Fed Requests Comments on Third Set of Regulation Z Rules Implementing the New Credit Card Law

CUNA
March 16, 2010 | COMMENTS

The Federal Reserve Board (Fed) has recently published a third and final set of proposed rules that implement provisions of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (CARD Act). The CARD Act was enacted last year, which prohibits and restricts a number of credit card practices. This new proposal would implement the provisions of the CARD Act that will become effective on August 22, 2010. These include provisions that are intended to protect credit card users from unreasonable penalty fees and that require card issuers to reconsider interest rate increases every six months after the increased rate becomes effective. This proposal follows two earlier rules that implement the CARD Act provisions, which were effective as of August 20, 2009 and February 22, 2010. The links below provide more information about these two earlier rules:

• http://www.cuna.org/reg_advocacy/member/download/fed_012910.pdf
• http://www.cuna.org/reg_advocacy/reg_call/rcc_073009.html

Among other provisions, this proposal would:

• Provide three alternatives for determining the amount of penalty fees that may be charged by card issuers.
• Prohibit card issuers from charging penalty fees that exceed the dollar amount associated with the violation. For example, if the minimum payment is $20, the late payment fee could no longer exceed $20.
• Ban inactivity fees or fees for closing and terminating the account.
• Prevent card issuers from charging multiple penalty fees based on a single violation.
• Require card issuers to inform consumers of the reasons for an increased interest rate.
• Require issuers that have increased rates since January 1, 2009 to review these increases every six months and to reduce the rate if the reasons for the increase no longer apply.
• These rules apply to credit cards, but not to home equity lines of credit accessed by credit cards or to overdraft lines of credit accessed by debit cards.
• Comments on the proposed rules are due April 14, 2010 . Comments are due to CUNA by April 6, 2010. If commenting directly to the Fed, you must refer to Docket No. R-1384.

Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Senior Vice President and Deputy General Counsel Mary Dunn at mdunn@cuna.com or Senior Assistant General Counsel Jeff Bloch at jbloch@cuna.com ; or mail them to Mary and Jeff in c/o CUNA's Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, 6th Floor, Washington, DC 20004. You may also contact us if you would like a copy of the proposed rules or you may access them here .

> View the full comment call at cuna.org here