Overview

In December 2008, the Federal Reserve Board, Office of Thrift Supervision and National Credit Union Administration established a series of credit card rules to protect consumer interests. To promote fair access to credit, financial institutions will be prohibited from engaging in specific acts or practices that have now been deemed predatory. This series of rules will significantly impact the availability of credit.

The rules aim to

• Protect consumers from unexpected increases in credit card interest rates by generally prohibiting increases in a rate during the first year after an account is opened and increases in a rate that applies to an existing credit card balance;
• Prohibit creditors from issuing a credit card to a consumer who is younger than the age of 21 unless the consumer has the ability to make the required payments or obtains the signature of a parent or other cosigner with the ability to do so;
• Require creditors to obtain a consumer's consent before charging fees for transactions that exceed the credit limit;
• Limit the high fees associated with subprime credit cards;
• Ban creditors from using the "two-cycle" billing method to impose interest charges; and
• Prohibit creditors from allocating payments in ways that maximize interest charges.

New Federal Reserve rules also give debit and ATM card users additional options regarding overdrafts. In the coming months, banks, credit unions, and other financial institutions must offer you the ability to make decisions about overdrafts for transactions made with your debit or ATM cards.

Regulatory Resources

A 2010 press release about the specific credit card rules that will go into effect this year.

Federal Reserve Board

The Federal Reserve has created a Web page to explain the new credit card rules and what the protections will mean for you.

Every six months the Federal Reserve System surveys the terms of credit card plans offered by financial institutions and publishes a report of the findings.

What You Need to Know: New Overdraft Rules for ATM and Credit Cards 

Federal Register

The Federal Reserve Board of Governors, Office of Thrift Supervision, Treasury and National Credit Union Administration request public commentary on a revised proposal of the Federal Trade Commission Act. 

The Federal Reserve Board of Governors proposes amendments to Regulation Z provisions and requests public commentary. 

Federal Reserve Bank of Philadelphia

Consumer Compliance Outlook publishes an article about the “Final Rules on Credit Card and Overdraft Practices”.

Federal Reserve Bank of Boston

A personal finance guide about choosing credit cards.

March 23, 2010

Press Release

Final Rules on Gift Card Expiration 

March 3, 2010

Press Release

Amendment to Regulation Z 

March 19, 2009

Sandra F. Braunstein, Director, Division of Consumer and Community Affairs

Protections for Users of Credit Cards and Overdraft Services
Before the Subcommittee on Financial Institutions and Consumer Credit, Committee of Financial Services, U.S. House of Representatives, Washington, D.C.

June 13, 2007

Governor Randall S. Kroszner

The Role of Federal Banking Agencies in Strengthening Federal Financial Consumer Protection
Before the Committee on Financial Services, U.S. House of Representatives