The law is being implemented in three stages. Yesterday’s rules will take effect Feb. 22. The first parts of the law, giving consumers the right to reject rate increases within 45 days and pay off balances at the current rate, took effect Aug. 20. Companies also began mailing bills 21 days before the due date, up from 14 previously. Other rules go into effect in 2010.
The U.S. Federal Reserve proposed rules yesterday that will end banks’ ability to apply credit card payments to balances with the lowest interest rates first, implementing legislation Congress passed in May.
The Fed also proposed that creditors obtain consumers’ consent before charging fees for transactions that exceed credit limits. Restrictions on lending to people under the age of 21 and subprime credit card fees were also included, the Fed said in a statement.
“The rule bans several harmful practices and requires greater transparency in the disclosure of the terms and conditions of credit card accounts,” Federal Reserve Governor Elizabeth Duke said in the statement.