WASHINGTON-The Federal Reserve is expected to amend its so-called Regulation Z governing credit card rules in a way that would bar certain lucrative practices by card issuers.
The expected reforms would ban so-called universal default, which allows issuers to raise rates on cards for unrelated defaults; and the imposition of retroactive rate increases; and will extend payment periods. The rules are also expected to ban double-cycle billing, where card companies reach back to earlier billing cycles to help calculate interest charged in the current cycle.
The new rules will need the approval of NCUA to apply to credit unions and the credit union regulator is expected to adopt them later that day. The Fed's action will come as Congress is expected to take up the matter early next year and impose even stiffer reforms.
