Wheatworks Blog: Financial Matters

The Federal Reserve Board has proposed rules to prohibit unfair practices regarding credit cards and overdraft services that would, among other provisions, protect consumers from unexpected increases in the rate charged on pre-existing credit card balances.

Highlights of the Proposed Rules Regarding Credit Cards and Overdraft Services:
http://www.federalreserve.gov/newsevents/press/bcreg/highlightscredit20080502.htm

The press release and request for public comments is here:
http://www.federalreserve.gov/newsevents/press/bcreg/20080502a.htm

Read the public comments of (literally) 1000’s of other citizens (most seem to greatly favor these new consumer-friendly regulations):
http://www.federalreserve.gov/newsevents/press/bcreg/highlightscredit20080502.htm

The rules, proposed for public comment under the Federal Trade Commission Act (FTC Act), also would forbid banks from imposing interest charges using the “two-cycle” billing method, would require that consumers receive a reasonable amount of time to make their credit card payments, and would prohibit the use of payment allocation methods that unfairly maximize interest charges. They also include protections for consumers that use overdraft services offered by their bank.

“The proposed rules are intended to establish a new baseline for fairness in how credit card plans operate,” said Federal Reserve Chairman Ben S. Bernanke. “Consumers relying on credit cards should be better able to predict how their decisions and actions will affect their costs.”

If you’ve ever wanted the chance to speak out against unfair practices by credit card companies and banks, this is your chance. Make your opinion known!