MOST SHARED
- Analyze This?
- Realty Check: USDA Home Loans
- Health Care Bill Nears Test Vote
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
- Dems Snare 60 Votes to Move Ahead on Health Care
- 100% Mortgage Financing From USDA
- Warren Buffett and Bill Gates: Keeping America Great
- Hirschhorn: Greed...or Fear
- Health Care Bill Clears First Senate Hurdle
- The Richest Members of the US Congress
- New Consensus Sees Stimulus Package as Worthy Step
- Wall Street Jobs Slow to Return Despite Record Profits
- Thanksgiving Week Stuffed With Economic News
- Black Friday Deals May Not Signal Retail Comeback
- Investors to Goldman: Be Less Greedy
- UPS Sets New Rates For 2010
- Victoria's Secret Hopes to Rekindle Desire for Lingerie
- 'New Moon' Takes Record $72.7M Box Office Bite
- How Stock Investors Can Play Holiday Travel
- Time Lapse World Series Is A Great Play
- Hirschhorn: Greed...or Fear
- My Top 10 Tech Toys for the Holidays
- iPhone a Better Gaming Platform Than Android?
- May Day For Dendreon
- 100% Mortgage Financing From USDA
- Holiday Tipping: Who And How Much
- Deep Discounts Should Make It a Very Tech-y Holiday
Text Size 
Banks expect to tighten terms on credit cards in response to a new law that aims to protect consumers from sudden rate hikes, the Federal Reserve said Monday.
 |
A quarterly survey by the Fed found that many banks expect to increase rates, reduce credit limits and raise annual fees for both prime borrowers — those with sound credit histories—as well as more risky "non-prime" borrowers, who have tarnished credit. Banks also expected to raise minimum credit scores for non-prime borrowers, the Fed said.
Banks already have been pushing through rate increases in anticipation of the new rules. Because of that, the House recently approved legislation to speed up the law's effective date and have the provisions take effect immediately, although prospects are dim for Senate passage.
Most of the new credit card provisions are slated to take effect on Feb. 22.
Many people and businesses are still having trouble obtaining loans, a force that is likely to restrain the economic recovery.
It's a delicate dance for policymakers in Washington. They want banks to boost lending, but no one wants a return to the lax standards that many blame for contributing to the worst financial crisis since the 1930s.
The Fed's survey also found that nearly 26 percent of banks said they tightened standards over the past three months on home mortgages for prime borrowers. That was up slightly from almost 22 percent in the survey released in August, but is significantly below the peak of about 75 percent that reported tightening standards for such loans in July 2008.
For the third straight quarter, banks reported that demand for such loans grew, the Fed said.
Just over 30 percent of banks reported tightening standards on nontraditional mortgages, such as adjustable-rate loans with multiple-payment options. That's down from nearly 46 percent in the previous survey.
Information about what impact the new credit card law will have on banks came from a special one-time question in the new survey.
- Technology can make or break a fortune in the world of alternative energy.
- Many people are facing the holidays with substantially smaller incomes. Here’s how some are adapting.
- Jim Cramer is a proponent of stocks that pay healthy dividends, and here are his top five dividend plays.
- From salt, to lip balm to envelopes, it turns out that bacon flavoring can sell almost anything.
- The homebuyer's tax credit jacked sales for a while, but 2010 is looking weak. Now what?
- CNBC’s technology reporter Jim Goldman guides you through the best gadgets to buy this holiday season.
Data is a real-time snapshot *Data is delayed at least 15 minutes