Awesome news! I will be paying cash until that date then. How do you like the free market now, credit cards??

In other news, credit card companies announced today new, more abusive policies that they'll begin to follow. I hear that public floggings are on the table.

When do these rules take affect? Immediately? Most of the articles don't say.

@Zclyh3:

Oops. I'm blind.

Sweet, that should leave enough time for the CC industry's lawyers and lobbyists to find loopholes for every last consumer protection in the bill.

"Too bad by the time they take effect the recession will probably be over." Yep by that time it'll be a depression. Go economy!

I'm happy about the new rules. I feel credit card companies exploit people thinking they have unlimited money, then drop the hammer with a 29%+ interest rate.

I have 2 credit cards and luckily I know better. Never spend more than your bank says you have.

2010?!?!? Seriously, this is the ultimate in government responding too slowly. It's the financial equivalent of the Katrina response. Expect to see financial water bottles dropped from helicopter while all these peeps drown in their debt. Great rules, too bad they're going to be two years too late.

Realistically, you can't just implement new rules immediately. CSRs need to be retrained, software needs to be altered, business plans need to be adjusted, and so forth. That said, it does seem like this stuff could get implemented faster than the July 2010 deadline - maybe by the end of 2009.

"Too bad by the time they take effect the recession will probably be over."

You're probably being a little optimistic there... However, a lot of the damage from toxic CC debts will probably already be done at that point, and I can't wait to find out what the next economic implosion will be after that!

Wait... so they can still raise the interest on past purchases? I thought they were gunan get rid of that too

While I don't think the government should be meddling in private business like this, if they're going to do it they might as well do it right. These rules don't really seem to do much. No "Excessive" fees on holds that excess limit? What's excessive mean? $30? $300? Subprime credit cards? Come on, if you're going to waste time and money promulgating regulations, at least make some that apply more than a small minority of cardholders. While I recognize that they are the ones that are the "most harmed", it seems unfair to offer only them special protections from the CC companies. Why not enact rules that truly protect everyone?

@jaydez:

oops.. nevermind.. it's in the full article.

Didn't really see anything in there about doubling your interest rate after you finally put a big balance on the card (ahem Citibank).

And they state you can "opt out". Hmm...that's great if I want the card with the longest history and biggest credit limit disappearing from my credit report.

I think the mid-2010 date was a concession to the Lobbiest. This wouldn't have passed with the CC Banks signoff. Allows the banks to be abusive for another 18 months while gradually introducing these changes ahead of time, but selling it as being 'consumer friendly'

@Erwos: You're implying that some of the CSRs have had training in the first place?

@Erwos: Yeah, nice isn't it? They can change OUR terms whenever they feel like it, but we can't change THEIR terms without giving them 'time to adjust'

Hopefully we'll see regulation on universal default policies, and perhaps the enacting of federal policies on usary rates.

Bringing transparency to fees, establishing minimum payment terms, and removing the clearly egregious double-cycle billing practices are all good things; but thanks to the great state of Delaware, CC companies still have broad license to extract Shylock's rates on all revolving debt from people drowning in the deep end of the debt pool.

@Erwos: Good point. 2009 is almost here, and to make big changes like this and make all the changes that are needed, a year to a year and a half does seem rather reasonable.

Too bad by the time they take effect the recession will probably be over

Ben, I applaud your optimism. And I hope you turn out to be correct.

I'm fully expecting the CC companies to lobby Congress to repeal some, if not all, of this new policy. Even if they aren't able to repeal it, it's likely the companies will QQ enough about the changes, they'll be able to convince the government to push back the date until sometime in 2012 or beyond.

They will lobby them away before they take effect.
Step1. Regulators makes new rules.
Step2. Regulators get showered in gifts from lobbies.
Step3. Regulators 'relax' (undoes) the new rules.

I'm going to be a regulator.

That's impressive grouping for using .22 longs.

The irony of your comments couldn't be higher. Government regulations telling a private company how to run their business couldn't be less "free market".@HRHKingFridayXX:

@xwildebeestx: Who hunts credit cards with a .22? I think some type of shotgun would be better.

No excessive fees for exceeding credit limit because of a hold placed on the account
I like that, except "No excessive fees" is increadibly vague. I suspect consumers will see little change regarding this aspect.

I wish these rules were taking effect in 6-12 months rather than 18, but at least they're on their way. But I also figure they're going to do all the bad shit they can between now and July 2010.

@Pylon83:

One would assume that the actual document this brief article is summarizing provides ample definition of these terms.

@blitzcat: Which regulators are going to get showered in gifts? Who at OTS or OCC is receiving gifts from ABA or credit card companies?

@OmniZero: They only "exploit" the people who don't know any better.

When I worked in retail, do you know how many people I told that "interest rates don't matter if you pay off the balance every month"? Of course, you want a nice one just in case you have to carry a balance unforseen, but if you're trying to build credit get whatever junk card you can and buy gas. ONLY GAS. And pay it off and the interest rate can't do shit. And they were like "you're a genius!"

And none of them knew that - as they all ran up $20k and then just got another card...

We've been living in "credit-world" where you can buy anything regardless of if you can afford it or not - just pay it off later, it won't hurt!

Now people are realizing the consequences of buying wants, not needs, and living beyond their means. Pity they weren't properly educated before it was too late and they took the economy down with them.

A bunch of preliminary articles yesterday mentioned disallowing the "universal default" however; I can't find any articles that mention it at all today. Did they stop "universal default?"

@Quake 'n' Shake: notice the provision: "for a hold placed on the account." They don't say no excessive fees, just no excessive fees in that one instance.

@spazztastic: Did you read the article?

"Minimum time before notice of change of terms takes effect goes from 15 to 45 days."

So, no, they now MUST give you time to adjust.

Anyone else expecting their rates to increase over the next six months for absolutely no reason other than the impending regulations?

As I read this the first thought that popped into my head was, "Pelosi and Reid actually did something constructive?"

And then I read the link. Turns out the Treasury Dept. deserves the credit.

@Zclyh3: Did you read the article? It says July!

I bet you do not read your credit card terms either!

So...how this effect the responsible people who aren't living beyond their means and aren't carrying any credit card debt?

You call it "anti-consumer?" Since when were credit card companies and banks about the the consumer?

Did these regs come from the Banking Committee of our beloved Congress? Of course not! That would be a conflict of interest wouldn't it? No, it came from the Treasury Department.

@joeblevins: It was a concession to _reality_. You cannot seriously expect the credit card companies to just totally revamp the way they work with a day's notice.

@Quake 'n' Shake: Obviously this isn't the whole bill, it's a summary. I'm sure the bill is about 38,718,734,872 pages long and needs 672 lawyers to comprehend. The actually amount is in there somewhere.

@Erwos:
If 15 days is good enough for the millions of consumers, I'd think it would also be generous enough for a few hundred CC companies.

@Pylon83: The CC companies are just fine with government "meddling" when it helps them make money, so they can shove the Free Market For Me, Not For Thee argument somewhere dark and ugly.

@sir_pantsalot: The best thing to hunt credit cards with is a pair of scissors.

@Saboth:
It's the FIRST bullet point:
No more raising rates on existing balances

@nataku83: Next economic implosions - Medicaire/Medicaid and Social Security. You can't keep those Ponzi schemes running forever either, especially with a prolonged recession and fewer younger workers.

@xkaluv: IMO, that has to be the number one thing they need to curtail. Not allowing them to apply a higher rate to existing balances is a biggie but UD is just ridiculous.

For people asking what the regs actually do, twenty seconds of research will get you the Office of Thrift Regulation, which includes the press release, summary of the final rule and text of the final rule (PDF links at the bottom).

[www.ots.treas.gov]

Odd I don't see that they got rid of universal default. I though that was one thing they were trying to get rid of as part of this whole credit 'revamp'?

I think the first 2 points are good ones in general. The other ones seem very vauge and don't benefit the consumer much.

@johnfrombrooklyn: Well the credit card companies are fee to get out of the market if they don't like it. That makes the market free enough.

The consequence to some of the more punitive rules is less available credit. I don't think that's a bad thing vis-a-vis individual consumer behavior - I certainly don't like to take on debt personally. That said, there will be a consequent reduction in spending and a downward price impact.

That's not necessarily a bad thing. Debt should be available for high-quality borrowers making large durables purchases, not runs to the store. I doubt carrying a balance on tomatoes or Nikes is beneficial to our consumer. Of course it will also promote unemployment...