WASHINGTON - NCUA and banking regulators have proposed new rules barring certain unfair credit card practices and setting new requirements on overdraft protection programs, including allowing members to opt out of such programs, also known as bounce protection.
The proposal would prohibit a federal credit union from imposing an overdraft protection fee unless the member has specifically agreed to participate, or “opt-in” to the program.
It would also bar the imposition of an overdraft charge for a debit card transaction if the overdraft is caused solely by a hold placed on funds that exceed the actual purchase amount of the transaction. The proposal would also prohibit several credit card practices, most of them rare for credit unions.
It would bar retroactive interest rate increases on existing balances; over-the-credit limit fees for a member who exceeds the limit because a hold is placed on the account; and double-cycle billing, and would require a minimum of 21 days between the mailing of a statement and the due date; bar retroactive interest rate increases on existing balances, among other things.
The proposal was made in conjunction with the Federal Reserve Board and the Office of Thrift Supervision. (c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved. http://www.cujournal.com http://www.sourcemedia.com
