The New York Times today exhorted the Federal Reserve Board to adopt its proposed new rules for the credit card industry in an editorial titled "Listen to the 56,000." The editorial noted a "clear message" to regulators from the tens of thousands of consumers who sent letters to the Fed during a comment period that ended Monday (CardLine, 8/5). Most of comments came from consumers outraged by credit card practices resulting in unexpected interest-rate hikes and soaring fees for late payments and over-limit charges. "The Federal Reserve should swiftly adopt its proposed rules against unfair or deceptive credit card practices," the editorial states, adding that pending legislation to restrict other card-industry practices lawmakers deem abusive also should move forward. "Congress should give consumers what they need and deserve–fair and clear lending rules for credit cards." The Federal Reserve Board, the Office of Thrift Supervision and the National Credit Union Administration in May proposed new rules on Unfair of Deceptive Acts or Practices under the Federal Trade Commission Act what would prohibit many longstanding card industry practices. Among other provisions, the proposed rules would ban issuers' ability to raise cardholders' interest rates on existing balances, except in special circumstances; give cardholders more time to make payments; and require issuers to post payments to cardholders' lowest-interest balances first. The American Bankers Association claims in its 31-page comment on the Fed's proposed rules that restricting card issuers' ability to reprice interest rates based on risk would boost interest rates and fees for all borrowers, not just those who fail to make payments or whose payments arrive late. "The Fed's rules are likely to go through, but we're hoping that they make at least a few modifications, as we have suggested," Nessa Feddis, association vice president and general counsel, tells CardLine. "The credit card industry has been accused of using tricks and traps on consumers, but these regulations promise to be very difficult for lenders to comply with. They will have a chilling effect on the industry and will ultimately limit most consumers' borrowing options."

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