A comparison of House and Senate legislative proposals with pending Federal Reserve regulations:
_HOUSE BILL:
Takes effect a year after enactment, except for requirement of notice before interest rates are increased, which goes into effect in 90 days. The bill:
_ Prohibits double-cycle billing and "retroactive" interest rate hikes on previous balances.
_ Requires that customers receive 45 days notice before their interest rates are increased.
_ Bans the issuance of credit cards to anyone under 18. Sets underwriting standards for credit cards for college students, including limiting credit lines if there is no co-signer, and requiring proof of income and credit history.
_ Bans "pay-to-pay" fees, which are charged when someone pays their bill by phone or on the Internet.
_ Allows individuals to set a credit limit for themselves that cannot be exceeded. If a bank approves a purchase that pushes the consumer above their limit, the bank cannot charge a fee.
_SENATE BILL:
Takes effect nine months after enactment.
_Bans double-cycle billing and retroactive rate increases.
_Requires that customers receive 45 days notice before rates are increased.
_Bans the issuance of credit cards to people under 21 unless they show they can repay the debt or complete a certified financial literacy course.
_Bans "pay-to-pay" fees.
_Restricts over-the-limit fees to one each billing cycle.
_Prevents card issuers from changing any terms of a contract so long as the card holder pays on time.
_FEDERAL RESERVE REGULATIONS:
Take effect in July 2010.
_ Require banks to give customers a reasonable time, such as 21 days, to pay their bill before it is considered late.
_ Require banks to give customers 45 days notice before raising interest rates on new purchases, even if the customer is late or delinquent in paying their account.
_ Prohibit, in most cases, retroactive rate increases.
_ Prohibit double-cycle billing.
_ Limit excessive fees charged on subprime credit cards, which are marketed to people with bad credit.
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