Castle, Fed Rep Outline New Credit Card Rules

Press Release

Delaware Congressman Mike Castle and Sandra Braunstein, Director of the Federal Reserve's Consumer and Community Affairs Division, held a press briefing to discuss a recently passed package of credit-card regulations. In December, the Federal Reserve published its final rules implementing changes to credit card industry operations under the Unfair and Deceptive Acts or Practices (UDAP) law. According to the Federal Reserve, these regulations are aimed at curbing credit-card abuses, promote fairness in the industry, and protect consumers.

These regulations will affect nearly all aspects of consumer credit-card accounts, including marketing and advertising, disclosures given with applications and at account opening, billing statements, and issuers' ability to change account terms. This week in the U.S. House Financial Services Committee, there will be a mark-up on legislation that would codify nearly identical regulations; however the legislation in discussion will force card issuers to implement the changes within a more constricting timeframe.

"Reforms can improve consumer protections without jeopardizing the access to credit on which 145 million Americans rely," said Rep. Castle. "The proposed rules were carefully crafted after conducting rigorous consumer tests and after taking into consideration over 60,000 comments on the proposals during the allotted public comment period. After reviewing feedback from both the public and industry, the Federal Reserve announced that the final comprehensive list of reforms would be implemented by July 1, 2010-- ensuring banks and credit unions have enough time to overhaul their business models to ensure sound implementation of these rules. This week, Congress will take issue with the amount of time allowed for rule implementation so I hope we can have some productive negotiation there."

Sandra Braunstein, a Delawarean who is an expert in her field, oversees the Federal Reserve's actions on these regulations and briefly explained how they could impact both Delaware consumers and card issuers.

"Through extensive consumer testing and comments, we discovered that the great majority of people found credit card disclosures difficult to navigate and difficult to understand," said Ms. Braunstein. "We have designed these rules to both improve transparency and ban practices that are harmful to consumers. However, we should be mindful of the fact that the changes will be difficult for card issuers to implement and it is important to give them sufficient time to change the way they do business."

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