The Federal Reserve board will meet this week to finalise changes to rules governing the $970bn credit card business.
Widely hailed by consumer groups as urgently needed reforms to protect borrowers, the changes could lead to the banking industry losing more than $10bn in annual interest payments, says a study by the law firm Morrison & Foerster. This could prompt credit card lenders to raise prices and tighten lending standards, reducing the availability of credit for US consumers.
The proposed rules, which are expected to pass with only minor changes when the Fed meets on Thursday, will impose strict disclosure standards on credit card lenders and prohibit a series of common pricing practices that have drawn fire for exposing borrowers to unforeseen costs.