Commentator are weighing in on recent amendments to the CARD Act issued by the Federal Reserve for implementation in October 2011. Changes include clarifications on the 25% fee limit (based on the credit line), the inability to change credit terms on existing balances unless the cardholder is 60 days+ delinquent, and a focus on individual (not household) income when considering ability to pay. But the real news may be in the fact that the Feds issued the rules at all:
Ultimately, it appears that the nation’s central bank conducted a self-critique
in the wake of the Great Recession and concluded that an approach that more thoroughly enforces existing regulations and safe underwriting standards was needed to prevent another instance of unsafe practices snowballing into a national economic nadir.
While these changes—which will not take effect until October 2011 at the earliest—will not provide resounding repercussions, they will without a doubt effectively supplement the existing consumer credit card bill of rights
. Additionally, and perhaps even more importantly, the attitude being exhibited by this “New Fed” is extremely encouraging for America’s economic future.
Similarly the National Consumer Law Center comments that despite the CARD Act, there is still a need for safer consumer card products:
Even after the current reforms, credit card issuers can use bait and switch tactics on interest rates or can hide the cost of a card in fees and complicated rules. Credit cards too often trap consumers in a cycle of debt, despite new rules requiring issuers to consider ability to pay. Typical minimum payments extend the debt out 20 years.
See the press NCLC press release at: http://www.prnewswire.com/news-releases/beyond-the-credit-card-act-features-of-a-safer-credit-card-108973664.html