Earlier today, the Federal Reserve proposed new rules to prohibit unfair practices regarding credit cards and overdraft services. that would, among other provisions, protect consumers from unexpected increases in the rate charged on pre-existing credit card balances.

In addition, the proposed rules addresses practices in connection with a bank’s payment of overdrafts on a deposit account, whether the overdraft is created by check, a withdrawal at an ATM, a debit card purchase, or other transactions. The proposed rules require institutions to provide consumers with notice and an opportunity to opt out of the payment of overdrafts, before any overdraft fees or charges may be imposed on consumers' accounts.

The Fed has been joined in putting forth these proposed changes by the Office of Thrift Supervision and the National Credit Union Administration.

The Fed has provided a seventy-five day comment period - to approximately mid-July. Providing your comments to the Fed is easy:

• On the Fed's web site (scroll down to the bottom of the page to Regulation AA - click on submit comment)
• By email to: regs.comments@federalreserve.gov
• By fax to (202) 452-3819 or (202) 452-3102
• By regular mail to:

  Jennifer J. Johnson
Secretary, Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, NW
Washington, DC 20551

Be sure to reference Docket No. R-1314 in your written comments.

All comments will be public and can be viewed online on the Fed's web site. Pro or con - this is an important payment card industry issue worth your comments.

In an article titled 'The Tangled Web of PCI Compliance', Richard Adhikari writes for InternetNews.com - 'The best protection is to have an end-to-end solution combining source code reviews, vulnerability scans and Web application firewalls.'

In an article titled 'Crooks Have Your Card and You Don't Even Know It', Elisabeth Leamy reports for ABC News on credit and debit card cloning. She writes: "It's a bonanza for crooks. They used to have to risk going into stores to buy pricey merchandise, which they then sold for cash. Now they can just drain ATMs. Authorities say specialized crews do nothing but hit ATMs, cashing out on behalf of other identity thieves and taking a commission."

Menekse Gencer of PayPal blogs on the PayPal Blog about PayPal's mobile money transfer application now available on Sprint phones.

Adam Levitin writes on the Credit Slips blog about his take on the proposed Fed/OTS/NCUA Credit Card Regulations. "Some of the proposed rules are quite favorable for consumer interests. Others do not go far enough, however, and perhaps most importantly, there are several major issues that the proposed rules simply do not address."

Celent has published a new report titled 'The Would-Be Disruptors: New Technologies in the Remittance Space' that 'examines the application of technology that holds the promise of making cross-border remittances less expensive, quicker, more convenient, and more secure than traditional low-tech remittance models.' READ MORE »

Edward L. Yingling, president and CEO of the American Bankers Association, issued a press release today discussing the Federal Reserve's proposed rules regarding credit card practices and overdraft fees saying: “The Federal Reserve’s proposal is an unprecedented regulatory intrusion into marketplace pricing and product offerings. We are deeply concerned that these rules will result in less competition, higher consumer prices, fewer consumer choices and reduced consumer access to credit cards. In short, everyday consumers will bear the real cost of these proposals. READ MORE »

The Federal Reserve Board has announced proposed new rules to 'prohibit unfair practices regarding credit cards and overdraft services that would, among other provisions, protect consumers from unexpected increases in the rate charged on pre-existing credit card balances.' The Fed is acting in concert with the Office of Thrift Supervision and the National Credit Union Administration in pursuing these new rules.

"The proposed rules are intended to establish a new baseline for fairness in how credit card plans operate," said Federal Reserve Chairman Ben S. Bernanke. "Consumers relying on credit cards should be better able to predict how their decisions and actions will affect their costs." READ MORE »

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Visa Inc. has announced its first corporate responsibility program at the Clinton Global Initiative (CGI) mid-year meeting, where Visa was recognized as the first CGI "commitment to action" of 2008. READ MORE »

MasterCard has announced that in Canada it has increased its purchase threshold limit for PayPass Tap & Go purchases to $50 across all retail categories, including quick serve restaurants, grocery stores, gas stations, movie theatres and convenience stores. READ MORE »

Saul Hansell reports for the New York Times that Amazon.com has 'filed a lawsuit challenging New York State’s new law forcing online retailers to collect sales tax on shipments to state residents.' Apparently the law is known anecdotally in the state as the "Amazon tax".

The National Credit Union Administration (NCUA) Board has announced it has approved a joint proposed rule prohibiting credit card and overdraft service practices as unfair or deceptive under Section 5 of the Federal Trade Commission Act.

In a Payment Systems Research Briefing titled Developments in Interchange Fees in the United States and Abroad , Terri Bradford and Fumiko Hayashi of the Federal Reserve Bank of Kansas City provide an update on developments in interchange fees in the United States and recent public authority involvement in interchange fees abroad. They write: "While regulation of interchange fees is still just a point of discussion in the United States, regulation abroad is a reality. In about 20 countries, public authorities have taken actions that limit the level of interchange fees or merchant discount fees."

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