Fed already getting an earful on proposed credit card rules

Consumers aren't wasting any time letting the Federal Reserve Board know how they feel about sweeping new credit card rules proposed on May 2.

The proposed rules would outlaw double-cycle billing on credit card accounts, give consumers a "reasonable amount of time to pay monthly bills" and limit fees and interest rate increases on outstanding credit card balances. In addition, the rules would require banks and savings institutions to allow consumers to opt out of overdraft fees on checking accounts and ban fees assessed when debit card accounts are overdrawn because of holds placed on the accounts.

As of late Monday, more than 78 people had already filed comments about the unfair and deceptive trade practices rules, which are expected to be finalized by year's end. If approved, it would be the first time in more than 23 years that the Fed exercised its powers under the Federal Trade Commission Act to ban banks from unfair and deceptive trade practices.

A random sampling of more than three-fourths of the comments found most were from consumers who overwhelmingly support the proposed rules. A few suggested the Fed had not gone far enough in rulemaking and more was needed. None of the comments were from credit card issuers.

Here's a sampling of some of the comments already filed:

"I very strongly support this proposal. I have been the victim of credit card companies who have subjectively raised my interest rates. I have never missed a payment or failed to pay at least my minimum payment. I am quite capable of managing my finances, as demonstrated by my record. Yet, I have been shocked more than once when my rates were raised in what appeared to be an arbitrary manner. And, the largest banks are as guilty as anyone. They have demonstrated that their greed needs to be regulated."
-- Jon Kubic of Colorado

"I hope that you do, indeed, regulate the banking practices in regard to credit cards. Many people are simply being taken advantage of without fully understanding how credit cards work. As a parent, I find it intensely upsetting that these companies target college students who are, in the main, still dependent on our incomes! No one who is not fully employed should have access to credit. It was much harder to come by back in the day, but much safer for those of us who were forced to budget accordingly. Not everyone needs to own the latest gadgets. Many of us remember growing up in homes with one central line phone, one television and no credit cards. We need to return to basics."
-- Lynn Osher of Florida 

"The Universal Default Clause is a huge cheat and should be abolished. It is completely unfair to make someone default on one credit card that is in good standing, simply because a default occurred on another separate credit card. It is absolute thievery."
-- Greg Faris of Florida

"Thank you for finally doing this! While it is true that everyone needs to understand their card agreements, many do not understand the financial implications of the words on the agreements and subsequent amendments (which is really where 'they' get you!). Please be sure that you include the atrocious practice by Bank of America referred to as "Keep The Change!" They will cause great hardship on people that do not understand the time value of money and what the difference in rates (between what they're savings pays them and what they pay to Bank of America). People will see themselves saving a great deal of money -- and PAYING much, much, much more. But by that time it will be too late! Thank you, again!"
-- Corey Davis of Michigan

"I believe it is past time for increased regulation of the credit card industry. The industry is prone to predatory practices and judging by the number of offers they spew forth, an enviable financial profit margin. I find it difficult to worry about "reduced availability to credit cards" because credit cards are over-available in the current regulatory framework. In the past, I've seen credit card offers mailed to my dog, my parakeet, under-age children... not to mention the dozens addressed to myself that I have to tear up regularly. I've looked at the offers occasionally - they would be disasters for anyone who actually filled out an application. There are some good credit cards. However, the industry as a whole is tarred by a striking resemblance to the spam emails offering viagra and other enhancements. I find it odd that the financial sector has economics that support the same marketing tactics as people selling fake drugs and pornography."
-- Chris Reichardt of California

How to comment
To submit comments on the proposed rules go to the Federal Reserve's Web site and look for Regulation AA for "unfair or deceptive acts or practices," Regulation Z for Truth in Lending disclosures or Regulation DD for Truth in Savings overdraft fee rules.

The comment period closes 75 days after the proposed rules are published in the Federal Register, but that date had not yet been set as of Monday.

So let them know what you think.

See related: "Agencies propose sweeping changes to credit card practices," "Fed to release new credit card regulations this week," "Fed: Expect credit card regulations this spring," "Regulation Z: Fed moves to change credit card rules," "House introduces Credit Cardholders' Bill of Rights," "Timing is everything for some credit card payments"