Consumer Payment Card News

Warning Labels

The Federal Reserve Board this week unveiled a proposal that would require credit card statements to carry a warning message on the consequences of paying only the minimum required payment. Among other proposed changes: a 45 day notice before raising an interest rate due to delinquency or default; requiring issuers to state on monthly statements the total interest and fees paid for the calendar year; and applying payments to the debt carrying the highest interest rate first. The major overhaul of Regulation Z (Truth in Lending) comes after gathering one-on-one feedback from cardholders over a two-year period. The new proposals also come on the heels of growing Congressional pressure to rein in credit card practices. The proposals are now open for public comment for the next four months and could take effect sometime in 2008. For complete details visit: “http://www.federalreserve.gov/BoardDocs/Press/bcreg/2007/20070523/default.htm”:http://www.federalreserve.gov/BoardDocs/Press/bcreg/2007/20070523/default.htm

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