WASHINGTON, DC – The US Federal Reserve has proposed new rules to protect consumers from unreasonable changes in interest rates on their credit card and overdraft repayments. The Fed says customers should be given reasonable time to pay off debts before being subject to extreme interest rate changes.
The proposed changes to the Fed’s Unfair or Deceptive Acts or Practices regulation (Regulation AA) would be complemented by separate proposals issued under the Truth in Lending Act (Regulation Z) and the Truth in Savings Act (Regulation DD).
The Fed proposals mark an attempt to increase customer protection from the profusion of small-print rules that credit card firms can impose on their customers. Payments that arrive by 5pm on the due date or on a public holiday now cannot be considered late.