The US Federal Reserve is to amend existing credit-card
regulations next year to crack down on banks who sidestep existing
regulations.
The amendments will include outlawing practices that card
issuers have introduced to avoid fee regulations enacted at the
start of the year.
Go deeper with GlobalData
In particular, the Fed wants to curb offers that avoid the new
legislation’s restrictions on interest rate increases.
Another amendment will be a crackdown on high up-front fees that
issuers have introduced to avoid a cap on charges.
Since February, US card issuers have been unable to raise rates
on existing account balances unless customers were overdue by more
than 60 days.
Cardholders are also entitled to 45 days notice of any
significant change made to their account’s terms and
conditions.
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By GlobalDataThe Fed is also proposing that card issuers consider an
applicant’s independent income and not household income when
setting credit limits.
