The word from the Washington Post is that The Federal Reserve, the Office of Thrift Supervision, and the National Credit Union Administration, have joined forces and would unveil today one of the most aggressive efforts in decades to crack down on the credit card industry.
The proposed regulations, which could be finalized by the end of the year, would slap the label of “unfair or deceptive” on certain practices, such as increasing interest rates for seemingly no reason, charging interest on debt that has been repaid and assessing late fees when consumers are not given a reasonable amount of time to make a payment.
The new regulations would be a marked change from the past since federal agencies have usually limited themselves to requiring the industry to do a better job at disclosing the fine print.
Several members of Congress have blasted the Fed for not effectively using its power to regulate card issuers. A number of influential leaders, including Sen. Christopher J. Dodd (D-Conn.), chairman of the Committee on Banking, Housing and Urban Affairs, have proposed their own bills to ban unfair practices.
The proposal also seeks to regulate overdraft protection, banning companies from assessing a fee unless the customer chooses not to opt out of that service.
Not surprisingly, the banking industry is not happy about the new regulations and insists it would make credit more scarce. They were quick to denounce the rules and vowed to fight them. But other consumer advocates and lawmakers said the proposals don’t go far enough and want lawmakers themselves to take action. However, the fact remains - this new proposal, would ‘finally’ send a clearer pro-consumer message.