The Fed announced today proposed rules that would restrict the fees and expiration dates that are normally applied to gift cards. But the rules won’t take effect until February of next year, missing out on the 2009 Christmas shopping season.
A proposed new consumer financial protection agency that would strip the Federal Reserve of many of its regulatory muscle over banking and credit card practices is coming under fire from the Obama Administration and others in the regulatory industry.
The chief executive of banking giant JPMorgan Chase & Co says that any bank, including Chase, is not too big to fail, contradicting the fueling rationale behind the huge bailouts of the financial crisis.
In new Fed rules announced today, financial institutions are prohibited from charging consumers fees for paying overdrafts on automated teller machine (ATM) and one-time debit card transactions, unless a consumer consents, or opts in, to the overdraft service for those types of transactions.
A quarterly survey of banks by the Fed found that card issuers will likely increase rates, reduce credit limits and hike annual fees in response to the credit card reform laws. They will take these actions for both prime borrowers — those with above average credit histories – and the higher-risk borrowers with poor or tainted credit, the Fed said.
On the same day that a 10.2 percent unemployment rate made headlines, here’s another bit of sobering news: Consumer credit fell in September for the eighth straight month. It is the longest, consecutive decline since the Federal Reserve started keeping records of consumer borrowing in 1943. The unemployment rate hit the highest level since 1983.