Consumer Payment Card News

Opt Outs

The Comptroller of the Currency said that consumers should be given the opportunity to “opt out” of certain credit card rate increases and be given the alternative of paying off the card balance at the old rate. In a speech to the Financial Services Roundtable, John Dugan noted that the Federal Reserve is now considering a change to its Truth-in-Lending rules that would generally prohibit rate increases unless the cardholder receives 45 days prior notice. The notice would allow the consumer to avoid the rate increase by paying off the card balance or moving it to another card. Dugan noted in his speech that the primary focus of regulation has been on providing consumers, through mandated disclosures, with meaningful notice of the costs and terms of the card, while leaving lenders generally free to set costs and terms. For more information visit: “http://www.occ.gov/dugan.htm”:http://www.occ.gov/dugan.htm

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