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ICBA Statement on New Credit Card Rules

Washington, D.C. (Dec. 18, 2008)— Karen Thomas, executive vice president of government relations for the Independent Community Bankers of America (ICBA), issued this statement following the release of new credit card regulations today by the Federal Reserve Board, the Office of Thrift Supervision and the National Credit Union Administration.

“The final credit card rules set forth today by regulators have both positive and negative consequences for American consumers. ICBA supports the credit card disclosure modifications since they will foster clearer, simpler, and more complete disclosures that will enable consumers to better understand how their credit card accounts operate.

“One of the hallmarks of community banks is the trust and respect that they have earned from their customers - something that they work diligently to maintain. The disclosure modifications will highlight that community banks are straightforward, trustworthy lenders that offer credit cards with lower rates, lower fees and fewer penalties and junk fees.

“However, we are deeply concerned that some of the restrictions announced today will do more harm than good. Restrictions can become a costly barrier to serving and protecting customers. We are deeply disappointed by the agencies' decision to prohibit banks' ability to re-price for risk. Removing the ability to re-price as the borrower's risk profile increases will cause higher rates for all consumers and will make it more difficult for marginal borrowers to continue to have access to credit.

“While ICBA opposes the risk-based pricing restrictions, we support the bans on double-cycle billing practices and high-fee subprime credit cards. Additionally, ICBA supports provisions that prohibit treating a payment as late unless the customer has been provided reasonable time to make the payment. These provisions will give customers ample time to receive and review their statements and then remit payments to avoid penalties.”

For more information, visit www.icba.org.