The Fed aims at credit cards

Source: New York Times (Free Registration)

After growing consumer complaints about hidden fees and other tricks of the credit card trade, the rules proposed by the Federal Reserve on Friday to deal with unfair or deceptive practices are a modest step forward. But the final versions of these rules will probably not go into effect until next year, and the nation’s bankers are already mounting a strong opposition to any changes in the rough ways they are allowed to do business. Representative Carolyn Maloney, the New York Democrat who has been pushing the important Credit Cardholders’ Bill of Rights in Congress, raised the right fears as the Fed proposal was announced. “These rules may be watered down. They might not be put into effect at all,” she scoffed. “The Federal Reserve is not in the Constitution to correct abuses. We are, and there are abusive, abusive, abusive practices going on now.” The powerful American Banking Association has already signaled its plans to fight the Fed’s rules as a “regulatory intrusion” into the market and warned that eventually it could be the consumers who lose because of changes. But consumers are already losing as their interest rates on the cards suddenly skyrocket, fees appear mysteriously on their bills and even the billing cycles get shortened to make it harder to pay on time.

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