In its first major rewrite of Truth in Lending rules in 26 years, the Federal Reserve on Wednesday proposed changes for credit card advertising, billing and consumer updates that would result in more
straightforward information about interest rates and fees. The proposals -- based on extensive use of consumer focus groups --respond to the increasing complexity of credit products.
Among the new rules, financial institutions and retailers offering credit cards and other products could advertise that they offer fixed interest rates only if they clearly state how long the rate is
set and that the rate is not allowed to rise during that period. If no time period is specified, the rate cannot increase while the card or loan is in effect. Ads mentioning minimum payments would
have to state how long it would take to pay off a balance making just minimum payments.
The proposed rules are subject to a 120-day comment period and could be modified before being
issued in final form. The Fed also plans a new look at mortgage and home-equity financing.
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