On December 18, 2008, Federal Regulators issued new rules that will significantly impact the credit card industry. The Federal Reserve Board (Board), Office of Thrift Supervision (OTS), and National Credit Union Association (NCUA) have concurrently issued final rules under the Federal Trade Commission Act banning certain credit card practices. The far reaching rules would prohibit unfair practices including limiting interest rate increases, preventing certain payment allocation methods, and banning "two-cycle billing" interest calculations.
The Federal Reserve also adopted comprehensive final rules under Regulation Z, Truth in Lending, which will revamp the disclosures that credit card companies must provide to consumers. According to Federal Reserve Chairman Ben Bernanke "the revised rules represent the most comprehensive and sweeping reforms ever adopted by the Board for credit card accounts. These protections will allow consumers to access credit on terms that are fair and more easily understood."
However, at a time when significant efforts are focused on promoting credit availability, industry advocates argue that the new rules go too far and may further tighten consumers' access to credit. The new rules go into effect on July 1, 2010.