Law and regulation

Two Countrywide mortgage servicing companies will pay $108 million to settle Federal Trade Commission charges that they collected excessive fees from borrowers. The settlement is one of the largest judgments imposed in an FTC case, and the largest involving a mortgage servicer. The funds will be used to reimburse overcharged homeowners whose loans were serviced by Countrywide before it was acquired by Bank of America in July 2008.

Lawmakers will return from their week-long Memorial Day recess this week right in the middle of a human scrum – hundreds of credit union executives crossing hundreds of retailers arguing over a key provision in the bank reform bill that would introduce government oversight of the market for cards interchange.

A Walt Disney World employee used skimming devices at several of the resort’s hotels to steal credit card information from guests, according to federal documents.

The final provisions of the Credit CARD Act take effect in August, but issuers are still in the dark about several key requirements that will affect how they calculate penalty fees.

West Virginia Attorney General Darrell McGraw announced that his office filed charges against four collection agencies in two lawsuits aimed at companies in Washington and New York for allegedly violating state consumer protection laws.

Small-business credit card issuers may continue skirting provisions of the Credit Card Accountability, Responsibility and Disclosure Act that went into effect earlier this year if regulators take the conclusions of a new Federal Reserve report to heart.

As lawmakers begin hashing out differences between the House and Senate regulatory reform bills next week, a big question is how hard proponents will fight for a stand-alone consumer protection agency.

Fair Debt Collection Practices Act lawsuits will spike this year to an estimated 11,750 cases – up from the record 8,287 cases in 2009, according to a forecast by one research firm.

In lobbying to defeat an amendment to the bank bill that would roll back interchange fees on debit cards credit unions are finding themselves in an increasingly familiar position – opposing the consumer lobby groups.

Nebraska state officials are warning lawmakers that the debit-interchange amendment in the Senate financial-reform bill could have grave implications for states using prepaid debit cards to disburse government benefits.

The Central Bank of Oman has decided to cap interest rates on credit cards banks in the sultanate issue. The policy takes effect June 1 and applies to existing and new card accounts.

The Independent Community Bankers of America and the Credit Union National Association have once again joined forces to oppose Sen. Richard Durbin's interchange amendment in the Senate regulatory reform bill, arguing the provision should not be part of the final legislation.

A federal judge has put a stop to three companies’ allegedly deceptive telemarketing calls, including robocalls, that promised to reduce consumers’ credit card interest rates.

The Better Business Bureau serving Central California is warning businesses to avoid collection agency Maxwell, Turner & Associates Inc. The Fresno, Calif. agency has an F-rating for 32 unanswered complaints within the last 10 months.

Chinese lawmakers have approved new regulations to help stem the rise in credit card defaults in that country.

While card issuers and payments networks are focusing their attention on the potential consumer harm from a Senate amendment that could lower debit card interchange rates, how it might affect issuers’ bottom lines remains murky, observers say.

Credit Union National Association on Tuesday said it has terminated talks aimed at minimizing the onerous interchange provisions in the bank reform bill and has changed focus to knocking the provision out of the bill when Senate and House leaders meet to reconcile different versions of the legislation.

Though legislation that would permit merchants to set minimum and maximum limits on card transactions remains pending in Congress, it is gaining a lot of attention among merchant acquirers and independent sales organizations.

Credit Union National Association lobbyists broke off negotiations congressional leaders last Thursday and are instead firing up the CU grassroots to lobby for provisions they hope will minimize the impact of interchange amendments added to the bank reform bill passed by the Senate last week.

Confronted with potentially dramatic reductions in checking overdraft-fee revenues, banks are intensely studying new laws and regulations and searching for quick ways to correct broken product economics and re-engage with customers.