Fed proposes rules for credit card debt
Included in the rules is a general prohibition on interest rate increases for credit card accounts that have been open for less than a year. Also, limits have been put on rate increases on existing credit card debt.
“This proposal is another step forward in the Federal Reserve’s efforts to ensure that consumers who rely on credit cards are treated fairly,” Federal Reserve Governor Elizabeth Duke said.
The proposed rules would also stop credit card companies from offering credit cards to people who are less than 21 years old. Younger people affected by the rule would have to show they could afford to make payments on a credit card or would have to get someone to co-sign for it.
The proposal would also require creditors to get a cardholder’s permission before raising fees associated with exceeding limits on a card’s credit line.
Many of the rules are in accord with new regulations passed through the Credit Card Accountability, Responsibility and Disclosure Act. A number of the act’s rules took effect in August of this year, with more rules to come in 2010.