WASHINGTON — Federal regulators on Thursday adopted sweeping new rules for the credit-card industry, but they don’t take effect until July 2010.
The Consumer Federation of America welcomed the new rules but expressed concern that they won’t take effect for another year and a half.
The group called on Congress to provide additional consumer protections to rein in abuses it said weren’t addressed by the regulators.
The head of the American Bankers Association said the changes “signal the beginning of a new market structure for credit cards.”
“While the new rules are designed to increase protections for consumers, the Fed itself has recognized that they may result in increased costs for most card users and reduced credit availability, particularly for consumers with lower credit scores or limited credit history,” ABA president and chief executive Edward Yingling said in a statement.
The new rules prohibit:
• Placing unfair time constraints on payments. A payment could not be deemed late unless the borrower is given a reasonable period of time, such as 21 days, to pay.
• Placing too-high fees for exceeding the credit limit solely because of a hold placed on the account.
• Unfairly computing balances in a computing tactic known as double-cycle billing.
• Unfairly adding security deposits and fees for issuing credit or making it available.
• Making deceptive offers of credit.
Under the new rules, credit-card lenders will be required to apply any payment above the minimum to the part of the balance with the highest interest rate.
