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Along with directing people to consumer credit counseling, new laws have Fed proposing rule changes
By Oscar Monfort on Mar 7th, 2010
In anticipation for the final set of regulations put forward by the Credit Card Accountability, Responsibility and Disclosure Act, the Federal Reserve Board recently proposed a new rule for credit card debt accounts.
The new rule would cover both fees and interest rates associated with credit cards. Fees could not exceed the amount that a person is being penalized for. In other words, a person who is late making a $20 minimum payment on an account could not be charged more than that amount through a penalty fee.
Furthermore, the rules would require that any rate increases that were made after January 1, 2009, be reviewed. If the conditions that caused the increase for the rates have changed, companies may have to reduce them.
The proposal from the Fed is tied to regulations from the Credit CARD Act that are set to take effect on August 22 of this year. The first two phases of the act are already being enforced.
As a result, some consumers may find that they have a better understanding of what it means to make only minimum payments on credit card debt. Furthermore, account holders are being directed to consumer credit counseling, as the act requires a number connecting people to these services be put on their monthly statements.
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