Press Release : New Credit Card Rules | Lower Late Penalty Fee

Here is a that was provided by Federal Reserve Board last June 15, 2010, the said law will be implemented on August 22, 2010. I think it will be really good for us credit card user. The top credit card company might not be so happy with the new since it will definitely decrease their income. So here is the new credit card :

Release Date: June 15, 2010

For immediate release

The Federal Reserve Board on Tuesday approved a final to protect credit card users from unreasonable late payment and other fees and to require credit card issuers to reconsider interest rate increases imposed since the beginning of last year.

“The new rules require that late payment and other fees be assessed in a way that is fairer and generally less costly for consumers,” said Federal Reserve Governor Elizabeth A. Duke. “Card issuers must also reevaluate recent interest rate increases and, if appropriate, reduce the rate.”

Among other things, the final , which amends Regulation Z (Truth in Lending):

  • Prohibits credit card issuers from charging a fee of more than $25 for paying late or otherwise violating the account’s terms unless the consumer has engaged in repeated violations or the issuer can show that a higher fee represents a reasonable proportion of the costs it incurs as a result of violations.
  • Prohibits credit card issuers from charging fees that exceed the dollar amount associated with the consumer’s violation. For example, card issuers will no longer be permitted to charge a $39 fee when a consumer is late making a $20 minimum payment. Instead, the fee cannot exceed $20.
  • Bans “inactivity” fees, such as fees based on the consumer’s failure to use the account to make new purchases.
  • Prevents issuers from charging multiple fees based on a single late payment or other violation of the account terms.
  • Requires issuers that have increased rates since January 1, 2009 to evaluate whether the reasons for the increase have changed and, if appropriate, to reduce the rate.

The final represents the third stage of the Federal Reserve’s implementation of the Credit Card Accountability Responsibility and Disclosure Act of 2009, which was enacted in May 2009. The provisions of the Act addressed in this will generally go into effect on August 22, 2010.

The notice that will be published in the Federal Register is attached.

Consumers can learn more about changes to their credit card accounts by accessing a new online publication, “What You Need to Know: New Credit Card Rules Effective Aug. 22.” It explains key changes consumers can expect from their credit card companies as a result of the third phase of the new credit card rules. Additional information about credit cards can be found on the Board’s website at: http://www.federalreserve.gov/creditcard/.

Attachment (1.73 MB PDF)

Hope this help

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