Consumer Payment Card News

Three Dirty Words

Ask any big banker how they perceive the “CARD Act,” the “FAIR Act” and
the “CFPA” and they will likely utter an expletive. Don’t even mention the “Expedited CARD Act” as it could get physical. Democrats have credit card and debit card issuers on the run with all the new rules. For consumers, the credit/debit card industry no longer holds all the cards. It has been a bad week for bankers. The Financial Services Committee unanimously passed the “Expedited CARD Reform for Consumers Act of 2009,” which moves up the effective date for credit card reforms from February 22nd to December 1st. The “Fairness and Accountability in Receiving (FAIR) Overdraft Coverage Act” was introduced this week by Senate Banking Committee Chairman Chris Dodd. The proposed Consumer Financial Protection Agency (CFPA), was also approved by a House panel this week.

The proposed “FAIR Overdraft Coverage Act” will:

* Require banks to get a customerâÂÂs consent before enrolling them in an overdraft protection program for ATM and debit card transactions;

* Limit the number of overdraft coverage fees banks can charge to one per month and six per year;

* Require fees be proportional to the cost of processing the overdraft;

* Stop institutions from manipulating the order in which they post transactions in order to rack up extra fees,

* Require that customers be notified when they overdraw their account and be given the option of being notified by email, text or traditional mail; and

* Require that customers be warned if an ATM or branch teller transaction will overdraw their account and be given the chance to cancel the transaction.

Click here for an overview of “THE CREDIT CARD ACCOUNTABILITY RESPONSIBILITY AND DISCLOSURE ACT” in PDF format.

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