Regardless, because they do does not mean that they should. I concur on being able to reassess but only as they are exposing themselves to new risk – aka new loans via new purchases. A compliant borrower should not be forced out of a contractual agreement by duress which is precisely what changing the terms of an existing loan does in your example of taking their business elsewhere. I don’t see any problem in allowing credit card companies to refuse to assume new risk as circumstances change but I see a big problem in allowing any lender to change the terms of an existing agreement on an existing loan without very good cause which seems to me to be the problem the Fed is trying to address.

2) My actual reason is to bolster consumer confidence damaged when credit card companies have used draconian practices. While it is in fact a loan the resemblance is closer to a utility in actual usage and it seems perfectly reasonable that a lender with much the same flexibility as a utility be required to give similar leeway. Credit cards market themselves as indispensable – as such they have no valid complaint when held to the same standard as other indispensable services.

3) No, compliance isn’t necessarily the issue in civil suit (here it isn’t) – practice is. In criminal law you’d be correct but not in civil. If the practice is indeed deceptive and unfair compliance with Federal guidelines is no defense. They can hardly argue ‘we didn’t realize’ with any credibility and ‘the Fed didn’t tell us not to’ is almost as weak a defense. Civil law assumes you have enough sense not to injure others either deliberately or negligently and here it’s the credit card companies that must take responsibility for their actions. Buyer beware is not a defense against a seller’s bad acts and neither is ‘there wasn’t a law specifically against that’.

The credit card companies are already vulnerable to suit – and it’s gonna get a lot nastier as binding arbitration falls under the judicial chopping block. If I were them I wouldn’t be wasting my time worrying about Fed labels – I’d be working up a settlement plan to try and head off most of the suits.

2.) Requiring 30 days because you feel like credit card companies brought it upon themselves and need to be weened from the late fee gravy train, as you put it, is not really a reason to institute the policy. Everyone’s in it to make money, and while I agree that some of the credit card companies’ practices need to be reined in, they still have to turn a profit in order to exist and offer their customer’s competitive rates and promotions. To that end, credit card companies aren’t the only ones to blame here. Yes, they’ve got some shady practices, I won’t deny that. However, consumers need to take a little responsibility for their actions as well. They need to be reading the disclosures and acting accordingly. Some people don’t and it’s their irresponsible use of credit that concerns me with a 30 day waiting period. Why do you need 30 additional days to make your payment? A 10-15 grace period is sufficient, and more than enough time to get a payment made. If you can’t make the payment within that time, then you probably can’t manage your debt very well and don’t need the card to begin with.

3.) There was clearly a gray area in this department and it’s safe to say that some credit card companies were toeing a line. However, they weren’t out of compliance and that’s the issue. It’s not about saying ‘the government didn’t say not to,’ technically, they weren’t doing anything illegal. If there was something occurring that was questionably illegal, then take it to court – whether it’s relabeled or not. But, putting credit card companies in a legal situation that invites civil suits en masse is only going to affect those of us who are compliant to the rules. We are going to lose out on the many benefits and competitive rates. As I said, these companies are in business to make money, if they’re not making money, then what’s the point of being in business? And they’re going to lose money on all sides of this issue, plain and simple. But, in my opinion, it’s not justified to cause legal action for something that was not illegal at the time because credit card companies did it to themselves. That’s about as much of an argument as ‘the government didn’t say not to.’

2) I think 30 days is more reasonable simply in light of the present practices. Credit card companies did this to themselves – in making grace periods so difficult they’ve made consumers not only wary but out right hostile. Consumer confidence needs to be rebuilt. Thirty days is more in line with utilities which credit cards in many ways have come to resemble even more than they resemble other financing because of the dependence on them. It may well be best for the card companies themselves long term by weaning them off the late fee gravy train.

3) Depends on the policy – was it actually ‘unfair and deceptive’? If so, there’s no real protection from suit now – ‘the government didn’t say not to’ isn’t a really good defense in court for any egregious practice. It doesn’t work in a court room any better than it did with your Mom. If the policy really was egregious then the relabeling may well set loose the hounds but it’s really only gonna turn them out a little earlier than they otherwise might have been. The wolf is at the door – labeling it ‘front door’ isn’t gonna do much more than let him in a bit sooner.