OK, the feds are “trying” to be responsible by reigning in the abusive credit card practices. Two different papers reported that 7 new reforms are proposed.

The New York Times

Federal bank regulators on Friday proposed a new set of rules to make it more difficult for credit card companies to raise rates arbitrarily, conceal high penalty fees or engage in other practices that consumer groups say are abusive.

Of course, the banks and the credit cards companies are opposed. As quoted in the NYT article, Edward L. Yingling, president and chief executive of the American Bankers Association…. “We are deeply concerned that these rules will result in less competition, higher consumer prices, fewer consumer choices and reduced consumer access to credit cards. In short, everyday consumers will bear the real cost of these proposals.”

Isn’t this what Microsoft said when they wanted to break up their stranglehold on PC software??

According to this article, even Ben Bernanke is throwing his support behond it…

“The proposed rules are intended to establish a new baseline for fairness in how credit card plans operate,” said Ben Bernanke, chairman of the Federal Reserve, which regulates many U.S. banks. “Consumers relying on credit cards should be better able to predict how their decisions and actions will affect their costs.”

http://money.cnn.com/

This should be interesting, as the credit card industry is a multi-trillion dollar industry and lots of their profits come from the things the Fed wants to reform, namely:

1. Allow consumers more time to pay monthly bills.
2. Prevent companies from applying interest-rate increases retroactively to pre-existing balances.
3. Ban “double cycle billing,” a practice that computes finance charges based on previous billing cycles.

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