Circular
Federal Reserve Proposes Amendments to Regulation Z to Clarify Rules Pertaining to Credit Cards
October 19, 2010
Circular No. 12252

The Federal Reserve Board has proposed a rule amending Regulation Z (Truth in Lending) to clarify aspects of the Board's rules protecting consumers who use credit cards. The proposal is intended to enhance protections for consumers and to resolve areas of uncertainty so that card issuers fully understand their compliance obligations. In particular, the proposal would clarify that:

  • Promotional programs that waive interest charges for a specified period of time are subject to the same protections as promotional programs that apply a reduced rate for a specified period.
  • Application and similar fees that a consumer is required to pay before a credit card account is opened are covered by the same limitations as fees charged during the first year after the account is opened.
  • When evaluating a consumer's ability to make the required payments before opening a new credit card account or increasing the credit limit on an existing account, card issuers must consider information regarding the consumer's independent income, rather than his or her household income.

The proposed rule represents the second stage of the Federal Reserve's implementation of the Credit Card Act.

See press release for full details.

Press release offsite