Many credit card issuers have delayed preparing for the strict new disclosure and pricing rules three federal agencies adopted yesterday (CardLine, 12/18), according to one analyst. "A lot of our clients were hoping there would be more time," Brian Shniderman, director of financial services for Deloitte Consulting LLP, tells CardLine. "I was surprised by how few had actually run models and looked at what they might change." Issuers have until July 1, 2010, before the new rules the Federal Reserve, Office of Thrift Supervision and National Credit Union Administration adopted go into effect. Among other changes, the regulations will limit when issuers may increase interest rates, require a minimum payment cycle of 21 days and require issuers to apply cardholders' payments first to their highest-interest balances. But issuers may face having to comply with new laws before the regulations go into effect. Rep. Carolyn Maloney (D-N.Y.), chair of the House Financial Service Committee's financial institutions subcommittee, said in a statement yesterday 18 months is too long to wait for changes in card-issuer practices, so she plans to "fill any gaps in protections" for consumers from the new regulations by introducing a new version of the Credit Cardholders' Bill of Rights early next year. Whether by regulation or law, issuers now should consider the stricter rules permanent additions to their card-issuing challenges and adjust their business models accordingly, says Shniderman. "We're going to see credit as something that is more a privilege than a right," he tells CardLine. "There are economic conditions that will cause voluntary and involuntary consumer migration away from credit cards to debit cards and (automated clearinghouse) payment instruments that haven't gotten any traction to this point."
