Authors

Curtis Arnold
Curtis Arnold, Editor-in-Chief
Joe Taylor
Joe Taylor Jr., Reporter
Amber Stubbs
Amber Stubbs, Managing Editor

Credit Card Law

  • Judge strikes down debit card rate cap, suggests lower fees for merchants

    Bankers call it a "windfall" for retailers, while merchants call it a chance to set "wrongs right." Either way, a late July decision by U.S. District Judge Richard Leon could impact consumers who use traditional bank accounts with linked debit cards. Judge Leon struck down a Federal Reserve rule that capped debit card processing fees [...]

  • FTC proposes limiting telemarketing sales to credit cards and mailed payments

    A proposal to update telemarketing regulations could restrict most "business-to-consumer" transactions to credit cards or mailed payments. In a statement to reporters, Federal Trade Commission officials announced their intentions to amend the Telemarketing Sales Rule so it forbids telemarketers from using remote checking account withdrawals or money transfers as forms of payment. FTC investigators reported that [...]

  • Stay-at-home spouses regain access to credit card offers after CFPB rule change

    Stay-at-home spouses no longer have to skirt federal rules when completing credit card applications, thanks to a new ruling from the Consumer Financial Protection Bureau. In a formal filing to the Federal Register, the CFPB clarified its position on whether spouses and partners without independent sources of income can reasonably expect to access joint savings [...]

  • California credit card ruling raises consumer privacy concerns

    A court ruling in California could pit privacy-conscious credit card users against retailers in a conflict over how companies can use customer information. In a February decision, the California Supreme Court ruled that online merchants selling digital downloads can ask for shoppers' personally identifiable information, such as ZIP codes and phone numbers, even if that [...]

  • Grocers reject Visa and MasterCard settlement deal, while legislators work to ban credit card surcharges

    As even more retailers back away from a proposed settlement with credit card issuers over payment processing fees, state legislators consider new rules that would prevent merchants from recouping costs with surcharges. In a unanimous decision, the board of the National Grocers Association voted to formally object to a deal with Visa and MasterCard that [...]

  • Federal Trade Commission investigates debit card processing fee limits

    The Federal Trade Commission left a Christmas Eve gift for Congress, in the form of a ten-page report outlining its enforcement of 2010's Dodd-Frank Wall Street Reform and Consumer Protection Act. Among other changes to federal finance regulations, the Dodd-Frank Act overhauled rules related to how much banks can charge retailers to process debit and [...]

  • FTC shuts down telemarketers promising balance transfer offers

    Government officials announced plans to halt operations that promised credit card balance transfers, low interest credit cards and other forms of debt relief. According to spokespeople at the Federal Trade Commission, continuing crackdowns on debt relief scams have resulted in at least seven court-ordered shutdowns during November and December. According to FTC spokesman Mitchell J. Katz, [...]

  • Restaurant owners reject proposed Visa, Mastercard swipe fee settlement

    The country's largest restaurant trade group joined a chorus of detractors claiming that a proposed settlement over credit card interchange fees doesn't go far enough to foster competition among merchant banks. In a statement to reporters, Dawn Sweeney, President and CEO of the National Restaurant Association, said that the pending deal with Visa, MasterCard, and [...]

  • NCPA rejects credit card transaction fee settlement

    Pharmacists joined convenience store owners, co-op operators, and Walmart in rejecting a proposed $7.25 billion settlement over credit card transaction fees. Leaders of the National Community Pharmacists Association issued a statement this month expressing concerns about the deal involving Visa, MasterCard, Bank of America, Citibank, and a host of other banks and transaction processing companies. According [...]

  • Law professor questions banks' adherence to student credit card rules

    Credit card issuers have found loopholes in regulations designed to limit marketing of student credit cards on campus, according to a professor at the University of Houston Law Center. In a new study released this month, professor Jim Hawkins reveals evidence that the Credit CARD Act has done relatively little to restrict aggressive sales tactics [...]

  • Hawaii sues credit card issuers for faulty consumer charges

    Seven major credit card companies and banks have been sued by the state of Hawaii for charging customers for products and services they didn't sign up for. The lawsuit is the latest in a string of complaints about what are being called fraudulent or erroneous charges by banks trying to recoup the losses felt from [...]

  • FTC wants to beef up consumer privacy standards

    Federal Trade Commission chairman Jon Leibowitz testified before Congress this month, calling his agency's new privacy framework a "decisive moment" for consumer privacy. In March, the FTC unveiled the final version of a report it has worked on since releasing an early public draft in December 2010. The report impacts credit card issuers, technology companies, and [...]

  • CFPB targets debt collectors, credit reporting agencies

    Debt collectors and credit reporting agencies will face new federal scrutiny under a proposal from the Consumer Financial Protection Bureau, officials announced this month. After signing a pledge with the Federal Trade Commission to avoid doubling up on bank investigations, CFPB Director Richard Cordray issued a statement to reporters about his agency's goal to bring [...]

  • Citibank deems frequent flier miles taxable income

    The value of frequent flier miles is coming under fire as Citibank recently issued IRS 1099 tax forms to members who received miles as an incentive to open a checking or savings account. In reporting an assigned dollar value to the miles, the bank is saying those miles represent taxable income. Whether or not the [...]

  • CFPB, FTC pledge to not "double-team" banks

    Now that President Obama has appointed Richard Cordray as director of the fledgling Consumer Financial Protection Bureau, the agency has ramped up its efforts to investigate and spotlight Americans' complaints about credit card issuers. The CFPB and the Federal Trade Commission released a memorandum of understanding about how the two government offices will collaborate on [...]

  • Supreme Court could bring arbitration back to credit card agreements

    A recent Supreme Court ruling could restore binding arbitration clauses to the terms and conditions of many American credit cards. Eight of the Supreme Court Justices ruled in favor of CompuCredit, a company marketing credit cards for bad credit. The company's customers had attempted to sue CompuCredit for marketing a Visa credit card that only [...]

  • Poker site operator pleads guilty to credit card charges

    Online poker website operator Brent Beckley surrendered to prosecutors and pled guilty to accepting credit cards for player bets, despite a United States ban. Credit card purchases for pet food and fitted sheets led federal investigators to Beckley's collection of front companies. Although Visa and MasterCard statements showed transactions from legitimate-sounding retailers, officials discovered the [...]

  • CFPB proposes public credit card complaint database

    As the government's personal finance watchdog sets its sights on reducing complaints about credit cards, banking lobbyists warn that negativity could sour public perception of the industry. After nearly six months of listening to cardholder concerns via its website, Twitter accounts, and toll free phone number, officials at the Consumer Financial Protection Bureau reported its [...]

  • Credit cards seen as more fair after CARD Act

    Only about one in eight Americans feel their credit card companies treated them unfairly in 2011, according to a nationwide survey commissioned by Consumer Reports. That's less than half the number of similar responses generated in 2009, the year that regulators passed the Credit CARD Act. The Consumer Reports National Research Center interviewed 1,258 consumers [...]

  • Durbin saves small businesses $1.8M in 3 days

    Proponents of the Durbin Amendment to the Dodd-Frank Act claimed that capping debit card transaction fees would create a trickle-down effect for both small businesses and consumers. This month, one of the country's largest credit card processors released specific details about the new regulation's impact on its customers. In a statement to reporters, representatives from [...]

  • California restricts employer access to credit reports

    Gov. Jerry Brown has signed a bill into law that restricts California employers' abilities to make hiring and promotion decisions based on the contents of employees' and applicants' credit reports. Democratic State Assemblyman Tony Mendoza sponsored bill AB22, proposing tighter clamps on the kinds of companies that can access information about prospective employees' credit card, auto [...]

  • Chase prevails, court says penalty interest rates OK

    Whether or not credit card interest rates can go up as a result of the Credit CARD Act of 2009 has been the source of much confusion. A new federal court ruling ends some of the debate, at least for now. The U.S. Court of Appeals for the Ninth Circuit has dismissed a lawsuit (McCoy v. [...]

  • Credit card hotline goes live at new consumer bureau

    Credit card companies have a new watchdog, with a robust online presence and a consumer hotline. The Consumer Financial Protection Bureau launched in July, settling into the authority granted by last year's financial reform legislation. Americans can report problems with credit cards, bank accounts, mortgages and other financial products by calling (855) 411-2372 or visiting [...]

  • Student credit card market retreats following CARD Act

    According to USA Today, a newly-released Federal Reserve survey shows that 17 percent fewer student credit card accounts were opened through colleges and alumni associations 2010 than in 2009, a decrease attributed to changes implemented as a result of the 2009 Credit CARD Act. New laws resulting from the CARD Act have placed limits on how [...]

  • Fed: Banks must release credit score when denying credit card application

    Credit card applicants can see their credit scores for free if a bank used that score to decline service, according to the Federal Reserve. The Federal Trade Commission and the Federal Reserve Board jointly announced their rules for implementing free credit score notifications under the the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Fair [...]

  • Fed splits the difference on debit card fee caps

    The Federal Reserve split the difference in the debate over debit card transaction fees this week, setting a flexible interchange fee cap much higher than the hard limit retailers requested, although still significantly lower than current charges. The Fed's ruling sets a base maximum rate of 21 cents per transaction, plus up to 0.05 percent [...]

  • Debit card interchange fee caps delayed

    Fed Chairman Ben Bernanke has received more than 11,000 letters commenting on the Federal Reserve Board's December 2010 proposal to limit interchange fees on debit cards to 12 cents. "Detailed and extensive" comments According to a March 30 report from American Banker, Bernanke said many of the letters were "quite detailed and extensive" and justified the Fed [...]

  • CARD Act tweaks offer new consumer protections

    The Credit Card Act of 2009 resulted in credit card companies making various changes to their consumer credit application process, promotional rates, and fee structure. A recently approved amendment to the CARD Act attempts to further protect consumers from overextending their credit, changing terms of promotions and being charged excessive fees. On March 18, 2011, the [...]

  • Consumers Union advocates lobbying CFPB for further credit card industry changes

    The Consumer Financial Protection Bureau may not get its full authority until the summer of 2011, but one consumer watchdog group wants to use the agency's warm-up period to help set its agenda for future credit card regulations. According to a statement from Consumers Union, Americans can still submit suggestions to the CFPB website for [...]

  • Warren hopes new credit card rules will bring fairness, openness.

    According to Elizabeth Warren, proposed changes to the way banks issue credit cards won't just help consumers, they should level the playing field in a competitive industry. In a published interview with American Banker's Cheyenne Hopkins, the government advisor tasked with setting up the new Consumer Protection Financial Bureau shared some insight from her early [...]

  • Federal Reserve announces tighter limits on credit card application fees

    After defending his bank's unusual credit card fee structure from criticism in Consumer Reports, Premier Bankcard CEO Miles Beacom must now find a way to please the Federal Reserve. Regulators at the Fed proposed changes to banking rules that would more strongly enforce restrictions on the size of service fees charged for access to subprime [...]

  • Federal Reserve to close Credit CARD Act loopholes

    Federal Reserve regulators announced their intent to close some of the loopholes from recent Credit CARD Act rule changes. In a press release, the Fed's Board stated that banks would soon have to consider an applicant's individual ability to repay his or her debt before opening a new credit card account. Traditionally, banks made decisions [...]

  • Credit CARD Act fails to stop some college students from opening accounts

    The Credit CARD Act may bounced bank promotions from college campuses and placed stringent restrictions on new student accounts. However, resourceful students have found alternative ways to bypass the Federal Reserve's regulations to get their hands on their own credit cards. According to a report on public radio newscast The Takeaway, the steps that under-21 [...]

  • Obama Names Elizabeth Warren to Treasury Advisory Post

    President Obama's vision for a Consumer Financial Protection Bureau took a step closer to reality this month with his appointment of Elizabeth Warren as a Special Advisor to the Treasury Secretary. The appointment sets the stage for hiring staff and securing space for the new government agency, with analysts expecting Obama to formally submit Warren's [...]

  • Credit Card Teasers and Perks Continue Despite New Rules

    New federal regulations haven't dampened competition in the credit card industry, according to analysts at Mintel Comperemedia. In fact, a Mintel review of credit card direct mail in the second fiscal quarter of 2010 reveals an increase in the number of new account offers compared to the same period in 2009.The post office delivered American [...]

  • Senators Seek Tougher Credit Card Penalty Cap

    Even as another wave of financial reform legislation reaches the President's desk, two Senators have warned Washington leaders that new credit card rules don't go far enough to protect Americans. Democrats Charles Schumer and Tom Harkin published an open letter to Federal Reserve Board Chairman Ben Bernanke, citing disappointment that the Credit CARD Act of [...]

  • House Passes Financial Reform Bill, Byrd's Death Delays Senate Vote

    Sharp partisan voting marked the House passage of the compromise financial reform bill, while Senate procedures may delay the bill's final signing until later this summer. Three Republicans voted for the bill, echoing the sentiments of Republican Senators who fought to prevent the bill from imposing new administration fees on large banks and hedge funds.The [...]

  • Credit Card Penalty Fees Capped at $35 After August 22

    Final details regarding the last piece of the Credit CARD Act's new rules fell into place during June, as regulators announced streamlined penalty fee structures for late payments and overlimit charges. On August 22, all credit card issuers must cap their penalty fees at $25 for a first-time event, or $35 when the cardholders violate [...]

  • Lawmakers Say Credit Card Fees Put Merchants vs. Customers

    Credit card reward programs put the needs of mom-and-pop merchants against the wants of affluent cardholders, according to Vermont Representative Peter Welch. Welch made the remarks to Bloomberg BusinessWeek reporter Peter Eichenbaum in support of Congressional proposals to limit credit card interchange fees. Credit card processors withhold between one and four percent of transaction amounts, [...]

  • Eight States Oppose Limits on Credit Card Merchant Fees

    Banks may have recruited state governments to help lobby against proposed caps on credit card merchant fees. According to a report in the Washington Post, at least eight state treasurers may sign a letter to Congress opposing limits on the amounts that merchants must pay for access to payment platforms operated by companies like Visa [...]

  • Proposed Law Targets Repeat Credit Card Charges

    Lawmakers hope a new bill could help consumers eliminate recurring credit card charges after signing up for "free trials" or other special marketing programs. The "Restore Online Shopper's Confidence Act" targets companies that use aggressive sales tactics to market monthly memberships or subscriptions, then make it difficult for consumers to cancel or dispute their charges.West [...]

  • Credit Card Interest Rate Cap Cancelled by Congress

    Despite a groundswell of grassroots support for the measure, the Senate voted to kill an amendment to the financial reform bill that would allow states to set maximum credit card interest rates. Rhode Island Senator Sheldon Whitehouse sponsored the measure, which was designed to restore the power to enforce local usury laws to state lawmakers.Under [...]

  • Visa, MasterCard React to Wall Street Reform Bill

    Wall Street lobbyists couldn't stop the Senate from approving a financial reform bill that critics say could hamper credit card issuers' ability to lend. While most of the bill's measures target derivatives trading and other high-risk financial activity, a new wave of rules would restrict cash flow to consumer and small business credit lines. Tighter [...]

  • Credit Card Companies Surrender Billions in Lost Fees

    Consumers have already saved $5 billion in credit card fees thanks to new laws, according to a recent report in USA Today. Researchers from the newspaper compiled survey responses from the nation's largest banks and credit card issuers to arrive at their estimates. While banks bemoan the loss of overdraft fees, locks on variable interest rates [...]

  • Federal Reserve Opens Credit Card Agreement Database to the Public

    The Federal Reserve recently launched the latest phase of its consumer education initiative, a comprehensive database of credit card agreements from over 300 prominent lenders. The database extends the reach of the "What You Need to Know" website unveiled earlier in the year. Consumers can use a search engine-style text box to hunt for a particular [...]

  • FTC Prepares to Enforce New Identity Theft Red Flags Rules

    Just days after identity thieves used Senate Majority Leader Dick Saslaw's credit card to purchase medical marijuana, the Federal Trade Commission has reminded banks and retail stores that its new "Red Flags Rule" takes effect June 1. The rule requires all financial institutions and creditors who process credit applications to implement a written identity theft prevention program. [...]

  • Vermont Law Encourages Credit Card Minimum Purchases

    Vermont lawmakers challenged credit card company rules this month by passing a law designed to reduce retailers' overhead. Along with language targeting identity theft, the bill protects merchants who want to set minimum sale amounts for credit card purchases. Under Vermont's bill--which goes to the governor for signature--merchants cannot be penalized for giving a discount [...]

  • Fed Proposes Caps on Credit Card Late Fees, Overlimit Penalties

    The third and final wave of new credit card regulations covered by the Credit CARD Act take effect this August, and the Federal Reserve recently released draft proposals to clarify pending limits on rates and fees. The Fed's new rules would cap overlimit penalty fees to the amount of the overage. Likewise, card issuers could only [...]

  • Credit CARD Act Protects Checking Account Holders, Too

    An often overlooked component of the Credit CARD Act can prevent consumers from racking up overdraft fees on their personal checking accounts, according to the Federal Reserve. The Fed posted new information to its consumer information website this month, clarifying some of the ways in which revised credit card regulations apply to debit card and ATM transactions.Under [...]

  • New Credit Card Rules Driving Some Customers to Payday Lenders

    Consumer credit industry analysts have observed another side effect of new credit card regulations: an increase in the number of Americans turning to payday lenders for emergency cash. With credit card companies focusing marketing on top-tier borrowers, consumers once served by subprime cards have resorted to more frequent check advance and payday loan services, according to a [...]

  • Discover Card CEO Warns Employees to Brace for Impact of New Credit Card Rules

    The head of Discover Card warned employees that credit card reforms backed by Congress could hurt some of their company's best customers. Speaking to a gathering of employees and reporters at the company's Salt Lake City facility, CEO David Nelms admitted that "the ultra-low rates of the past 10 years aren't going to be available anymore." Nelms [...]

  • San Diego Lawyer Sues Credit Card Issuer Over Rate Increase

    One San Diego attorney isn't giving up his credit limit without a fight. A report in the Huffington Post profiles Ben Pavone, a Bank of America accountholder who uses a high limit credit card to smooth out the cash flow for his legal practice. When Pavone requested a slight increase to his credit line during [...]

  • Volcker Rule Could Impact Credit Card Issuers

    Stock prices for some of America's largest credit card issuers suffered major drops this month when President Obama proposed legislation that could limit banks' business activities. While the so-called "Volcker Rule" wouldn't directly impact credit card usage, it could affect some of the other profit centers that offset losses from consumer lending.According to government officials, the [...]

  • Online Credit Card Chargebacks Gain Attention from NY Attorney General

    After months of scrutiny from Congressional investigators, a trio of online marketing companies has been targeted by New York State Attorney General Andrew Cuomo. Webloyalty, Affinion, and Vertrue all offer subscription-based discount programs that generate new memberships from special ads placed on the final page of an e-commerce site's checkout process. According to investigators, many [...]

  • New Rules May Force Credit Scores Out of Insurance Decisions

    Throughout the United States, insurance companies rely on credit reports to help determine the overall risk factor of a prospective policyholder. Some actuarial tables suggest that low credit scores often correlate with high-risk behavior or false claims. However, Washington State Insurance Commissioner Mike Kreidler told reporters this month that his office has launched new proposals to [...]

  • Fed Updates Regulation Z Credit Card Rules Before Deadline

    The credit card industry has known about the February 22nd deadline for implementation of the Credit CARD Act's new lending rules since the law was signed last May. This week, the Federal Reserve issued the formal regulations required by Congress, setting new ground rules for card issuers. By amending Regulation Z, the document that regulates American [...]

  • Credit Card ACT to Regulate Retail Gift Cards

    Retailers may have a harder time collecting spare change from the leftover balance of holiday gift cards in 2010, according to consumer advocates. A little known provision in the Credit CARD Act of 2009 places new restrictions on the service fees that card issuers and retailers can charge gift card recipients.Until recently, gift card merchants could [...]

  • Credit Card Rate Capped at 16 Percent Under New Proposal

    Lawmakers from New York and Massachusetts introduced legislation this month that would cap credit card interest rates at 16 percent, while forcing banks to abandon service charges deemed "unreasonable" on Capitol Hill. Democratic representatives Louise Slaughter and John Tierney proposed a new bill to be slated for a hearing before the House Rules panel. Under current [...]

  • Credit CARD Act Threatening Easy In-Store Credit Applications?

    Consumers may hear fewer requests to open store credit cards if the Federal Reserve fully implements new regulations under the Credit CARD Act in February. According to a report in the Wall Street Journal, retailers that process in-store credit card applications may have to start asking customers for proof of income. Currently, credit reporting bureaus supply the [...]

  • Government Accountability Office Sees Little to Gain from Credit Card Processing Caps

    Cutting credit card merchant processing fees may sound good to retailers and to lawmakers, but government analysts warn that a cap on transaction costs could carry some negative consequences. In a report released Thursday, the Government Accountability Office advised banking regulators that reduced interchange fees would likely fail to reduce retail prices--even for consumers who pay [...]

  • Deceptive Credit Card Applications Targeted by Law Enforcement

    Credit card applications have become so scarce in Americans' mailboxes that just about any kind of "pre-approved" offer can get consumers' attention. Law enforcement officials in Oregon and in the District of Columbia recently cracked down on a firm that promised access to easy credit in exchange for hefty processing fees. Investigators charged the company with [...]

  • Capitol Hill Eyes Credit Card Freeze This Winter

    At Representative Betsy Markey's office, mounting phone calls and letters about sudden changes to credit card interest rates and service fees has spurred new debate over banking regulations. Over the past few months, many consumers have been shocked to find sudden increases in their interest rates and steep drops in their available credit. Although some banks' [...]

  • Federal Reserve Board Publishes Credit Card Rule Changes

    The Federal Reserve Board finalized amendments to its list of credit card regulations, bringing those policies into alignment with industry changes mandated by the Credit CARD Act. Signed into law in May 2009, the Credit CARD Act places strict limits on the ways lenders can market and maintain credit card accounts. Changes to Regulation Z, [...]

  • Minnesota AG Sues Companies Offering Credit Card Negotiations

    Minnesota Attorney General Lori Swanson warned her state's residents this month to avoid scam artists pretending to help consumers negotiate lower credit card interest rates. In some cases, companies posed as consumers' own credit card lenders and convinced victims that enrollment in a debt settlement program was mandatory. Swanson filed three lawsuits against fly-by-night operators, [...]

  • Lawmakers Hint at December Start to New Credit Card Rules

    Washington lawmakers told reporters this week that an advance response to pending credit card legislation might just cause new rules to take effect even sooner than expected. Most of the provisions in the Credit CARD Act signed into law by President Obama become enforceable on February 22, 2010. To prepare for new rules that curb fees [...]

  • Legislation Puts Credit Card Rewards at Risk

    Proposed federal regulation could jeopardize the future of cash back credit cards and other rewards for account holders. Every credit card transaction carries an interchange fee, or a service charge deducted from a merchant's revenue. In the United States, interchange fees average around two percent. Those fees not only cover the costs of security, accounting, and transmission, [...]

  • Credit Card Rules Change Banks' Notification Policies

    Two provisions of the Credit Card Accountability Responsibility and Disclosure (CARD) Act take affect this month, impacting the ways that credit card issuers communicate with their customers. For cardholders, these new rules reduce the risk of missing payments due to delayed deliveries. They also address critics of the credit card industry, who accused many banks of relying [...]

  • Credit Card Marketing Restricted on Illinois College Campuses

    Credit card-sponsored frisbees, t-shirts, and travel vouchers for college students become a thing of the past on Illinois campuses this January. On August 11, Governor Pat Quinn signed a sweeping new law that restricts the marketing activities of credit card issuers on college campuses. The law also requires colleges to disclose revenues from co-branded credit cards and [...]

  • New Lending Laws Put Fixed-Rate Credit Card Offers on Endangered List

    When new credit card regulations take effect early in 2010, lenders will have few opportunities to adjust percentages on fixed-rate accounts. Even if borrowers make mistakes that entitle lenders to assess penalty rates, those borrowers can regain those original fixed-rate deals by getting their accounts back in line with program guidelines. Therefore, many personal finance experts [...]

  • Obama Proposes New Credit Card Oversight Agency

    Speaking to a gathering of lawmakers and journalists in Washington on June 17, President Obama unveiled his plan to overhaul government oversight of the consumer banking and financial services markets. As the cornerstone of the president's proposal, an independent regulatory agency would set baseline rules for credit cards, payday loan companies, and mortgage lenders. While [...]

  • California Legislation Helps Curb Card Fraud

    In the interest of preventing credit card fraud, lawmakers and policy makers throughout the United States are introducing legislation that will make it more difficult for individuals to have their identity stolen from old sales receipts. In the past, federal laws have been enacted to help protect victims of identity theft; one specific example is the [...]