Federal regulators on Tuesday proposed some clarifications to sweeping new rules designed to shield consumers from unfair credit card practices.
The regulators recommended that key protections in the rules — including restrictions on interest rate increases — would continue to apply to balances when the account is closed, acquired by a different financial institution or are transferred to another account issued by the same institution.
The rules still are slated to take effect in July 2010.
Under another proposed clarification, the regulators suggested that consumers who make purchases under programs that defer interest payments are protected by the new rules.
"If a consumer makes a purchase under this type of program, the terms governing interest charges on that purchase ... cannot be changed through a 'hair trigger' or 'universal default' rate increase," the regulators said.
Regulators said the clarifications are needed to "resolve confusion" about how institutions will comply with some aspects of the new rules.
The public, credit card companies and other interested parties have 30 days to weigh in on the proposed clarifications made by the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration.