Credit card industry faces reforms

WASHINGTON, Aug. 10 (UPI) -- Credit card companies can expect to face stricter regulations soon, say observers of the U.S. Congress and Federal Reserve.

A record number of nearly 56,000 public comments recently flowed into federal officials shortly after congressional committees had their own hearings on alleged abuses by credit card firms. The result is growing pressure on the Federal Reserve to implement proposed restrictions on increasing credit card rates, calculation of finance fees and late charges, the Washington Post reported Sunday.

"It's going to hem in the Fed. It's going to be harder for the Fed to weaken what they've proposed," said Travis Plunkett, legislative director of the Consumer Federation of America. "It sends a message that 'You did the right thing. Don't weaken it and move it along.'"

Financing officials reportedly expect some increased regulations but also expect to supply their own input.

"The Fed is going to act and is going to establish a new baseline for consumer protection that everyone will follow," said Ken Clayton, the American Bankers Association's senior vice president of card policy. "We hope they will consider the impact this will have on pricing in the marketplace."