Thursday, December 18, 2008

New Credit Card Rules

OTS 08-062 - OTS Approves Final Rule Barring Unfair Credit Card Practices

Washington, D.C. — The Office of Thrift Supervision (OTS) approved a final rule today to prohibit savings associations from engaging in unfair credit card practices. The Federal Reserve Board (FRB) and the National Credit Union Administration (NCUA) are expected to approve the same rule, thus providing consumers with uniform protections regardless of which type of financial institution issued their credit card.

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The new rules contain the following provisions:

  • There are additional restrictions on when the interest rate on an outstanding balance may be increased.
  • There is a "safe harbor" of 21 days between when a statement is mailed or received and a payment is considered late.
  • Payments in excess of the minimum payment must be allocated to either the higher interest balance or proportionately to all balances.
  • Double-cycle billing is banned.
  • There are additional restrictions on how high fees for subprime cards may be financed.

08-062A UDAP Final Rule - Fact Sheet 482006.pdf (18.8 KBs)
08-062B UDAP Final Rule - Full 482007.pdf (696.5 KBs)

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1 comment:

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