FINALLY!

Banks and consumers brace for new credit card rules
By John Poirier John Poirier Sat Dec 13, 10:56 pm ET
WASHINGTON (Reuters) – The U.S. credit card industry, harshly criticized for imposing surprise fees (Like for your birthday) and interest rate hikes (through the mountains) on consumers, may face a day of reckoning on Thursday..
The Federal Reserve is to vote on credit card reforms that may bring some relief to customers who face a variety of ways for being hit with late fees, universal defaults, shorter payment periods and confusing payment allocations for different balances.
Credit card users likely also would see easier-to-read tables in their monthly statements as a result of the changes.
The new rules, which were proposed earlier this year, are expected to total some 1,000 pages. They need approval of the Federal Reserve, the Office of Thrift Supervision (What office is this? Can I run for it?) and the National Credit Union Administration, which all are expected to act on Thursday (in a devine comedy that pits the poor working American up against corporate greed).
Consumer groups (UNNAMED consumer groups) say practices of credit card companies blindside consumers (because of the little teenie tiny print) and U.S. lawmakers have threatened legislation (GASP) if regulators did not use their consumer protection powers to reform the industry (reform- it is becoming an overused term).
With Democrats strengthening their control of the next Congress that convenes in January and the financial services sector in turmoil, credit card companies that resisted the changes increasingly have accepted them as inevitable.
They have warned (or THREATENED) that interest rates charged on credit cards will rise for all borrowers and that borrowing limits may be reduce because of the changes.
The industry maintains that credit cards provide a service to consumers with convenience and sometimes free loans (FREE loan, more like FEE loans).
"The new rules will be a challenge to the business," said Peter Garuccio, director of public relations at the American Bankers Association trade group.
POTENTIAL SWEEPING IMPACT
In 2007, Americans were using an estimated 694.4 million credit cards with Visa, MasterCard, American Express and Discover logos, according to the Card Industry Directory.
Banking regulators have been using focus groups to test the impact of changing credit card rules for the past couple of years and on Thursday are expected finalize some changes.
They are expected to prohibit credit card companies from increasing rates at will, with some exceptions such as those that apply to people who fail to pay a bill within 30 days.
So-called universal default, which permits changing card terms if the borrower defaults on another bill such as utilities or a gym membership, also is expected to be banned (because sometimes you just forget to pay the water bill.)
Double-cycle billing, in which card companies reach back to earlier billing cycles to help calculate interest charged in the current cycle, also is expected to be eliminated. (I wish they would make sure that DUE dates didn't fall on Sunday's or holidays so we have to pay them early)
With the U.S. economy in recession, the market that trades in credit card asset-backed securities faces increasing stress as more consumers fall behind on payments.
As delinquencies and charge-offs -- balances written off as uncollectible -- on credit cards rise, investors demand higher yield spreads for credit card-backed securities.
The ABA represents the biggest issuers of Visa and MasterCard. Citigroup, Bank of America and JPMorgan Chase enjoyed almost 70 percent of the credit card market at the end of 2007, according to the Card Industry Directory.
(Reporting by John Poirier; Editing by Vicki Allen)