July 02, 2008
MONTPELIER, Vt.—As Vermonters work to meet the challenges of a struggling U.S. economy, the last thing they need is to be charged unfairly for the use of their credit cards. So said State Treasurer Jeb Spaulding, who today issued an alert to Vermonters that the deadline for public comment on new federal rules regulating credit cards and overdraft services is fast approaching.
“I want to remind everyone that August 4 is the deadline for the public to formally share their views regarding proposed rules that would prohibit unfair charges and billing practices associated with credit cards and overdraft services,” said Spaulding. “The rule changes would ensure consumers have a reasonable amount of time to make payments and stop practices that unfairly maximize interest charges.”
The State Treasurer’s Office has created a web site to make it easier for Vermonters to comment on the rule changes. People may go to www.VermontTreasurer.gov and click on “Share Your Views!” The web page features a direct link to the public comment page for Unfair or Deceptive Acts or Practices as outlined in the Federal Register. Links are also provided to a highlights page of the proposed rules as well as the complete rule changes.
The Federal Reserve Board, the U.S. Department of the Treasury’s Office of Thrift Supervision, and the National Credit Union Administration in early May proposed rule changes under the Federal Trade Commission Act. The identical proposed rule changes by each of the federal regulators will enable the rules to apply to savings associations, banks, and federal credit unions.
The rule changes address public concern about fairness and transparency by:
• Ensuring that consumers have a reasonable amount of time to make a payment;
• Requiring that consumers receive the full benefit of discounted promotional rates on credit cards by applying payments in excess of the minimum to any higher-rate balances first;
• Prohibiting unfair interest rate increases on outstanding balances;
• Disallowing fees imposed when the credit limit is exceeded solely because a hold was placed on available credit (for example, when a consumer checks into a hotel, a hold is placed for the expected cost of the stay);
• Addressing unfair methods of computing balances;
• Prohibiting the practice of financing security deposits and fees for credit availability; and
• Requiring the disclosure of what factors determine whether a consumer qualifies for the lowest APR and highest credit limit advertised.
As the Senior Vice President for the National Association of State Treasurers, Spaulding is working with State Treasurers nationwide to urge the public to share their views on the proposed changes. Spaulding believes the rule changes will establish a uniform set of business practices that will benefit consumers and provide clear expectations for credit card companies.
“Credit cards have become a convenient financial tool for many people,” said Spaulding. “These rule changes will ensure that unfair practices costing Vermonters money will be regulated. It is a question of fairness and of helping people stretch their personal financial resources.”
Source: Office of the State Treasurer
Last Updated at: July 02, 2008 13:10:47