On September 29, the Federal Reserve Board on Tuesday proposed rules amending Regulation Z (part of the Truth in Lending Act) to protect consumers who use credit cards from a number of potentially costly practices. The proposed rule seeks to: (i) generally prohibit increases in a credit card interest rate during the first year after an account is opened; (ii) generally prohibit creditors from issuing a credit card to a consumer who is under the age of 21; (iii) require creditors to obtain a consumer’s consent before charging fees for transactions that exceed the credit limit; (iv) limit the high fees associated with subprime credit cards; (v) ban creditors from using the "two-cycle" billing method to impose interest charges; and (vi) prohibit creditors from allocating payments in ways that maximize interest charges.

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