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 based on applicants' self-reported household income, a system that could result in distorted calculations when spouses applied for multiple, individual accounts.

In the same announcement, regulators warned that "no-interest" credit card promotions would soon fall under the same rules as other kinds of teaser interest rate programs. Under existing law, credit card companies cannot alter the interest rate on an account unless a cardholder falls sixty days into delinquency. By classifying a zero interest program as a fee waiver instead of as a promotional interest rate, lenders could revoke the promotion without notice. Industry analysts view the Fed's announcement as a signal to banks that the regulatory body intended to strongly enforce the consumer protection elements of the Credit CARD Act.

About the Author


Joe Taylor Jr. is an internal business consultant for a Fortune 500 company, who writes about finance, culture, and design. He holds a Bachelor of Science in Communications from Ithaca College.